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With REITs and 1031 Exchanges ( http://articles.vasrue.com/Property_Exchange/index.html ), real estate investing can be a confusing landscape. But it also offers an exciting, challenging opportunity. What exactly is real estate investing, and why have so many people become millionaires in the latest boom?

Anytime you purchase real estate for a profit, whether it be rental property or a fixer-upper, you're participating in real estate investing. Many individuals have made it a full-time career, though anyone can become an investor and still keep their day job. But like any investment, be it stocks, bonds or business ventures, you're taking a risk. With real estate being such a costly investment, your risk can be relatively large. However, those willing to ride the tide and remain calm and focused through the industry's ups and downs have been known to earn substantial profits.

Real estate investors typically fall into two categories:

* Those who buy property at low or below market prices, renovate the property and sell it for a profit.

* Those who buy, intending to utilize it as rental property and collect ongoing revenue.

The first group of investors tends to seek out foreclosures or fixer-uppers and urgent sales due to death, divorce or job transfers. They spend between six months to a year making necessary repairs and high-yielding cosmetic improvements ranging from curb appeal upgrades such as new exterior paint to internal changes such as creating a completely new bathroom or kitchen. When the property hits the market again, these investors strive to not only recoup the expense of the purchase and renovation expenses, but also reap a sizable profit for their time and effort.

The second group of investors often find themselves in the role of rental property manager - collecting rents, ensuring property maintenance and attending to ongoing tenancy. Properties may include residential or commercial real estate leasing.

The real estate industry tends to be a relatively safe, long-term investment with a predictable profitability factor. If you're looking to generate a profit from a rental property or another type of real estate investment, watch the market and do your homework. Then give it a try.