Ch.1: Understanding Opportunity Cost When Investing In Property

http://ezinearticles.com/?Understanding-Opportunity-Cost-When-Investing-In-Property&id=21534

This article is basically telling us that when you are investing in property, there are economic factors in play. The most important factor is opportunity costs and that is what the article explains. This article states that most people get involved in property investing because they understand the opportunity to make money and be successful. But with these opportunities you also may loose a lot of stuff. This article tells us that if people are not fully aware of the opportunity costs then it may hurt them if they invest in property.
This article also tells us the meaning of opportunity costs which is the value of the best possible alternative that is given up in the decision to use a resource. For example, “If a city decides to build a hospital on vacant land that it owns, the opportunity cost is some other thing that might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sporting center on that land, or a parking lot, or the ability to sell the land to reduce the city's debt, and so on.”
The article relates to the chapter because this chapter focuses on opportunity costs and how important it is in making decisions. We use opportunity costs a lot in everyday life and for property investment it is the same idea. When investing into houses you must think of the situation that you are in and what decision you will make. Also, opportunity costs state what you are giving up in order to obtain that goal and direct costs state how much it will cost in doing this. The total is adding opportunity and direct costs to see if it is worth doing. In this case, the situation would be is it worth investing into houses? Also, this article tells us that if something is bought low, it should be sold high in order to be a successful seller.
My personal reflection on this article is that it is useful in understanding how opportunity costs relate to investing in property. Also, it clearly states the main points and has great examples that relate to the topic sentence which all relate to the chapter.