If you’ve been sitting on the fence about real estate investment, it’s time to jump into the game. And, once you do, your first hill to climb will involve getting your facts straight.
Here are the top nine myths I see spouted almost daily:
1. Investing in real estate is too risky.
Investing in anything can be risky. However, in real estate you have a tangible, hard asset to fall back on, unlike what occurs with the stock market. With the right skills and even just an average housing market, you can do well. But diminishing risk starts with having a viable investment plan and sticking to it.
2. You need a higher education to succeed as an investor.
You don’t have to have a college degree to invest in real estate. In fact, many real estate investors don’t. With the power of the Internet and data, such as pricing history and housing market summaries, researching the state of the market in your area is easier than ever. Reliable real estate investment books and webinars are also plentiful, and are available at a fraction of the cost of a college degree.
You can supplement your basic knowledge with your own research, and the rest will come with experience.
3. You have to be rich to invest in real estate.
Rome wasn’t built in a day and neither were most fortunes. Start with small ventures and find investment partners with similar goals. In real estate, there are also funding options that can help you get started. You can then use the return on smaller investments to fund your next, bigger venture.
4. Investing takes too much time.
You don’t have to be a full-time investor to make money! When starting out, most investors keep their full-time jobs in order to maintain income until they get rolling.
Be forewarned, however, that real-estate investment tests your time-management skills. You will still have plenty of time to remain at your full-time job, but the reality is that you will say “bye, bye” to your weekends.
5. That late-night TV infomercial real-estate stuff is your only option.
You don’t need to buy-in to a late-night infomercial. We’ve all seen the “Start investing with only $100” ads. But get-rich quick schemes set you up to fail. Instead, by doing your own research and creating your own investment plan, you’ll establish a viable path that will have you investing within weeks.
6. You need outstanding credit to invest.
Those with outstanding credit are few and far between. You don’t need the best credit to begin investing, but if your investment requires that you take out a loan (and most likely it will), you do need average or stable credit.
7. You can do just fine investing in the stock market.
“Just fine” isn’t a phrase investors should like to hear. Investing in the stock market is a viable option, but in real estate you have a tangible asset at the end of the day, no matter the outcome of the market. There’s also something to be said for taking something, making it yours and making it better.
8. Only institutions and full-time pros make it in real estate.
As previously mentioned, you don’t need to work in the market full time to make a return on your investment. Most of the investments made in your city’s low-to-medium income neighborhoods came from small-time investors. So, yes, it’s okay to start small! Even the smallest property investments can yield the most desirable return.
9. There is too much competition to be successful.
Never be afraid of a little competition. This will vary by city and neighborhood, but there’s no harm in competition if you can find a property within your budget. There are constantly new properties available on the market, meaning new opportunities for investment. If one area is slow to have properties available, don’t be afraid to look outside the area you originally intended to invest in.
These nine myths have kept many potentially great investors from succeeding, so don’t let that happen to you. It’s time to get in the game now!