Real Estate Investing Myths

Myth #1 – Real estate investing requires money to invest.

Yes, money is required for you to invest in real estate. It just does not have to be your own. Some of the options that are available are co-ownership, financing from moneylenders and the seller financing the property. A lot depends upon what is the motive for buying the property. A buyer could buy for making a long-term investment or for short-term profit from appreciation of the property’s value. It is possible to invest in property without using your own money. You have to learn the various means by which you can do so and look for the right opportunity.

Myth #2 – Real estate investing is too complicated.

There are certain nuances of the real estate investing business that you need to learn. However, it is not as complicated as it is made out to be. Let us take up a simple example. Suppose you buy a property today and put it on rent. The rental income covers your expenses. You sell that property after say five years and you earn a significant return on investment. With the money that you earn and with the help of a loan you buy a better property. You convert the property into multi-homes and sublet each home. You can either sell each individual home at a substantial profit or create a stream of multiple rental incomes.

Myth #3 – I do not have the time.

This is a very popular myth that prevents people from not just being able to invest in properties, but also from doing many other things. Successfully managing your time and learning how to multitask is very important in today’s competitive environment. So, cut out the two hours every day that you watch TV or go bowling and study the real estate market.

Make goals, define plans and take action to achieve those goals.

Myth #4 – Real estate investing is risky.

The truth is that there is an element of risk involved in almost all types of financial investments. Whether it is real estate, stock, mutual funds or gold, we just cannot wish the risk away. We also cannot think of making investments without first studying the investment option. The risks involved in real estate business are due to bad business acumen and reckless decisions made by individuals. Of course, at a macro level, the property market is considered less risky than either shares or mutual funds because of the large scale corrections that take place in the share market.