The Marcottes have been keeping an eye on the house next door to theirs. The couple living in it are going through a divorce; based on the divorce decree the house needs to be sold within the next 60 days. The Marcottes have been toying with the idea of actually making an offer on the house for a couple of reasons. They know that Luzs mother has been thinking of moving to the US form Peru, and would like to live close to her daughter. This would be nice for the Marcottes since she can be there for the kids when they get back from school, instead of going to a day-care center right after school. Besides this, the Marcottes would like to think of purchasing the house as a real-estate investment. They have been pleasantly surprised how the value of their house has increased in the last two years. They know that Mrs. Mogrovejo,(Luzs mother) will not be able to contribute much by way of rent, but they can always rent a couple of bedrooms to the local community college students, specially the foreign students who would prefer to live within walking distance of the college. Luz, who comes from Peru is not entirely convinced that investing money in another house is the best way to go. She believes investing in precious jewelry is a good alternative when diversifying an investment portfolio of stocks, bonds and mutual funds,. She knows that the 24-karat jewelry that her Mom had given her 20 years ago is worth a lot more currently. Luz believes that precious metal like gold will always increase in value, and is certainly a lot less of a hassle to take care of than a house.

1. Is investing in a house that they intend to rent out is the only way the Marcottes can invest in real estate? What other means of direct real estate investment are available to the Marcottes? 2. What are the indirect means of investing in real estate available to the Marcottes? 3. For a family like the Marcottes, what are the advantages of investing in real estate in the form of buying another house? 4. Are there any disadvantages in investing in real estate for the Marcottes