Real estate investing has a strong reputation for being one of the strongest investments you’ll ever make. There’s a reason millionaires still recommend it when asked for advice.
But you can make a lot of mistakes with real estate investing. That’s particularly true if you listen to the wrong people. People who like to share myths such as these.
Landlording Is Too Much Work
The housing market is for sales only. Being a landlord means you have to deal with deadbeats and lowlifes who don’t pay you, who have more rights than you, and who will constantly be breaking your stuff.
As insulting as all that sounds to renters, it is, unfortunately, a mindset that persists among the rental market ignorant. In reality, renting houses and apartments can provide you with a steady stream of passive income and turn it into a self-funding asset.
Still not crazy about DIY-ing anything? You can partner with a property manager to handle all the headaches for you.
Investing Out of State Is a Money Loser
If you’re going to play the real estate market, stick with the geographical location you know. Your familiarity will keep you from losing money.
Wrong again. There are money pits where you live, just as much as anywhere else in the nation or even the country where you live.
What keeps you from losing money is the amount of research that you do into the property, regardless of where it’s located. Look at factors like average time on the market, the average sale price of other similar properties in the area, and how long a specific property has been available.
Fixer-Uppers Are the Only Way to Make Money
A smart homeowner can make money with any house regardless of the number of repairs that it needs. In fact, it’s often easier to flip a well-built home without any problems instead of a red-ticket home that needs thousands of dollars in repairs.
If you’re capable of doing all the repairs yourself, you’ll probably be able to make money. Otherwise, fixer-uppers aren’t the goldmines you’ve been told.
Real Estate Investing Is For The Rich
A rental property is an easy way to start generating passive income from your real estate investment, and it’s as simple as buying a duplex and renting out the other side. That takes very little upfront capital. Basically, if you can buy a home, you can buy a duplex.
Cities Trump Rural and Suburban Areas
Cities are teeming with income properties, but you’ve also got to deal with the headache of finding people willing to pay high rental prices year-round to keep your vacancies low. Cities also have more regulatory red tape.
Rural and suburban areas are still in demand among upwardly mobile homebuyers looking to get out of the city. Investing in these properties now can make you a lot of money in the long run.
Timing Is Everything
Buying in and selling out at the right time does make you money, but it’s not the ripcord on the parachute you’re probably thinking. If you miss an opportunity, you’re not going to go splat.
There are always opportunities to make money in real estate. Again, it’s an investment. Patience, research, and timing, are the keys. One is no better than another.
Do Not Believe These Myths
Avoiding these myths of real estate investing will keep you attuned to the opportunities that are out there. Get into the market yourself, and you’ll see what works and what doesn’t. For more real estate tips and articles, check out some of our additional posts!