If you or your clients are thinking about getting into the real estate investment game and are a bit shy about it, a recent article on Entrepreneur.com may provide the push needed while at the same, keep you from making time-costing mistakes. In “9 Time-Wasting Real-Estate Myths to Avoid,” contributor and finance enthusiast Steven Kaufman provides his take on the real estate investment beliefs he sees daily.
1. Investing in real estate is too risky.
All investments have some degree of risk, according to Kaufman. Having the right skills can help you minimize the risk. A bonus to investing in real estate is you have a concrete asset that you can see and touch, unlike stock market investments.
2. You need higher education to succeed as an investor.
A college degree is not necessary for real estate investing. Educating yourself on the risks and advantages can be done through webinars and books on real estate investing, which are available online or in your public library. “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,” Kaufman wrote.
3. You have to be rich to invest in real estate.
Having a lot of money is not a prerequisite for real estate investing. Kaufman suggests you start small and find some investors to help you in your endeavor. “In real estate, there are also funding options that can help you get started,” according to Kaufman. “You can then use the return on smaller investments to fund your next, bigger venture.”
4. Investing takes too much time.
Not true. You can invest in real estate part-time while still working at your regular full-time job. However, Kaufman noted, real estate investors should be great time managers. “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,” he wrote.
5. That late-night TV infomercial real-estate stuff is your only option.
Those real estate infomercials are certainly not the only avenue to real estate investing. Kaufman suggests doing your research and creating a feasible plan for investing.
6. You need outstanding credit to invest.
A stellar credit score isn’t needed to invest in real estate. However, if taking out loans is part of your investment strategy, you will need moderate to good credit and a stable profile.
7. You can do just fine investing in the stock market.
Maybe, but maybe not. Similar to the reasons in myth number one, investing in real estate offers a tangible asset that is there no matter how well or badly the market does. “There’s also something to be said for taking something, making it yours and making it better,” Kaufman wrote.
8. Only institutions and full-time pros make it in real estate.
“Most of the investments made in your city’s low-to-medium income neighborhoods came from small-time investors,” Kaufman wrote. Starting small and on a part-time basis is a great way to get into real estate investing. Again, great time management is key.
9. There is too much competition to be successful.
Competition is part of the real estate investing landscape. Don’t let that deter you, Kaufman suggested. “Never be afraid of a little competition,” he wrote. “This will vary by city and neighborhood, but there’s no harm in competition if you can find a property within your budget.”
If you found these tips helpful, or have other tips for new investors that you’d like to share, let us know in the comment section below. We’d love to hear from you!