There are plenty of misconceptions about the real estate world. Unfortunately, many are circulating and causing investors or possible investors to become misinformed about real estate investing. We’re about to deconstruct 5 common misconceptions about real estate investing.
1. You Need a Lot of Money to Invest in Real Estate
You do need money for real estate investing, but there are several ways in which you can invest in real estate with little or no money. You can become an owner occupant, where you buy a house, fulfill its loan requirements within a year period, move out, rent your property, and repeat. Moreover, you may also consider wholesaling, which does not require any buying or selling on your part, you’d merely be mediating deals between other buyers and sellers.
In addition to that, look into partnering up with other investors, especially if you’re just starting out in real estate. Partnerships not only financially help you, they also allow you to benefit from the knowledge and experience of others (your partner/s). Moreover, you can consider remortgaging to buy a rental property. A remortgage essentially means that you’re switching your debt from one provider to another under a better offer to finance the purchase of an investment property.
The above are just a few options to consider when it comes to financing your investment. And these (along other methods) are proof that you do not need to invest in real estate.
2. You Don’t Need to Network
It is a known fact that successful real estate investors are good at networking. After all, real estate investing is about who you know, and who knows you. Networking provides you with a platform in which you can meet other investors, clients, realtors, lawyers, associates, possible partners, as well as possible tenants or buyers. Your network is a base that supports your investing venture. The more individuals you meet, the more likely your name will come up in conversation. Networking is an opportunity in real estate investing, so never undermine its importance or the importance of marketing yourself through word of mouth.
3. Real Estate Investing Isn’t a Good Idea
How is this even an argument? There are so many reasons as to why real estate investing is a great idea. Today’s demand for housing and rental property is increasing nationwide. Prices for real estate property is increasing, and so is appreciation and equity gains. It’s become rather difficult to identify select top markets where cities are competing across the US.
Briefly speaking, real estate investing is a good idea because it is a hedge against inflation, it allows the investor to enjoy flexibility, leverage, as well as tax tax benefits. Additionally, it is a less risky of an investment than stocks because the real estate market is much less volatile than the stock market.
And at the end of the day, people will always need a place to live, don’t they? So how exactly is real estate investing not a good idea?
4. Real Estate Investing Is Easy
Real estate investing is everything but easy. Why?
There’s a Lot to Learn
Real estate investing requires a lot of research. Let’s say you’re considering an investment in Chicago, you need to learn everything about current trends, mortgage rates, consumer habits, demand, changes in laws and legislation, and other factors affecting the market. To make sure you’re learning the best you can about real estate investing, make sure to use Mashvisor to browse thousands of properties nationwide. Mashvisor lets you view analytics on CoC return, cap and occupancy rates, estimated rental income, and much more.
There’s a Lot to Do
Real estate investing surely isn’t the easiest job out there. As an investor, you will need to vet, select, and manage tenants, market your property, manage your accounts and finances, maintain your real estate network, and do your homework… it seems like there aren’t enough hours in the day to do so, right? Don’t worry, we don’t mean to intimidate you or discourage you from real estate investing, but you should never take it lightly.
5. It’s All About Luck
Let’s get real, shall we?
If you’re a believer in luck, leave it aside when it comes to real estate investing. Instead of dwelling on luck, think about factors that indeed affect your success as a real estate investor like being prepared, flexible, and driven. And before you invest in real estate, invest in your own wealth of knowledge. Because in the end, knowledge and research is what takes you to the right city, the right neighborhood, and the right property to invest in.
Still think it’s all luck?
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