How, you might be wondering, would I go about buying an apartment building (or multiplex, or whatever) with the intention of renting it out? First, check out cities: what are supply and demand like? Is there something limiting supply, like an urban boundary? Is population growing, increasing demand? Is a new business moving in, boosting employment? Second, focus on a submarket: if the city is in a downturn, which region or neighbourhood is likely to turn around first? Third, get down to the nitty gritty: focus on gathering as much information as possibly to really get a feel for the area: meet with officials, local real estate agents, etc. At every stage, focus on the big forces of supply and demand, and also on location: is it near services, close to employment, in a good area? Then, buy the property, become wealthy, and wash, rinse, and repeat.

Real estate is an investment niche that frequently appeals to people: unlike the stock market, it provides something concrete that people can admire, and is often easier to understand because everyone owns or rents a house of their own. On the downside, however, it can often require a fair amount of capital to get started, in order to make the down payment, and though house prices generally (though not always) increase, covering the mortgage payments and taxes may mean you’re making less of a return than you would have if you’d just put it in the stock market and forgotten about it.

Rich Dad Poor Dad is a tremendously popular series, and has sparked a number of spinoffs, including this one, focused on real estate investing. It is intended for a novice in the field, and focuses on apartment buildings, though many of the lessons are also relevant to single-family homes. McElroy’s approach is also quite mathematical: he focuses on calculating your return on investment, and then using that number to calculate what the building is worth. Buy it only if you can get it for less. Words that could have done a lot for people who suffered in the sub-prime crisis, I suspect.

The book is not as strong as some of Rich Dad Poor Dad’s other works, but if you have a particular interest in real estate, it’s not a bad introduction. I think for most people, though, the sums he talks about in buying and selling apartment buildings make it seem a bit far away: many families have experience buying single family homes, but most haven’t considered buying multi-million dollar apartments. The principles are the same, but it makes it feel less relevant. Still, if you can get past that (or are considering buying apartments yourself!), then a solid introduction to a very popular field.