Top 5 Myths About Investing in Real Estate

Top 5 Myths About Investing in Real Estate

Real Estate InvestingReal Estate Investment is not as tricky and calculated subject as it sounds. Once you get a hang of it, you can make good profit off it. With the dreams of having large sums of money in your pockets, attached are endless misconceptions about real estate investment business.

Top 5 have been tackled below:

1) You Need Your Own Cash To Invest

Money should never be a problem. What you need is a good real estate deal; it will attract money by itself. If you are able to settle a good price on a property, it will become easier to find serious buyers. You do not need to have a lot of money to become a real estate investor, as you will not be investing all of your money in the business.

There are several ways you can get some cash to do the job for you – bank loans and private money lending are two of the many routes. Believe it or not, there are people who want you to invest their money without them having any trouble. Many of them are not even looking for huge profit/interest in return.

2) You Have To Be Licensed And Certified To Invest

This myth is totally absurd. You do not require a specific degree, any diploma or even a license to become a real estate investor. You are not supposed to be an agent; it is not a requirement, to take part in real estate investing. Having a license or a certificate is totally your choice; it is not, in any case, a necessity.

You can become a real estate investor if you put your mind to it. You do not require reading thick books on it; most of it comes with experience. However, for your personal growth, knowledge and interest, reading up on anything has never failed to become productive. Rarely anyone asks you to show your license certifying you as an investor. So, what you need to believe is if there is anything which is keeping you from getting in real estate business, it is not a certificate.

3) Banks Are The Only Funding Source

Taking loans from bank is one way. There are several methods you can fund your real estate investment business. It is not a piece of cake, taking loans from bank. Private lending or private investment is something, which should be considered when delving into this business. A win-win situation is created between the money lender and you: they lend you the money they have bucket loads of and you get to use it to invest. Their profit lies in their returns.

Private lenders get help with tax deductions and depreciation in their properties through their investments. A schedule of paying back is made, which usually states that the money will be paid in six to twelve months. You get to negotiate how your investor will get their returns.

4) Only Way To Invest Is By Directly Owning Properties

Another common myth/misconception about real estate investment is that the only way one can invest in real estate is by buying the properties themselves. By directly owning the properties, you will get to call yourself a real estate investor. Keeping this misconception in mind, what people do is buy houses in residential, faraway areas, vacation spots thinking they are investing. For this kind of investment, you actually need big bucks.

However, another way to invest is by investing in commercial real estate. The options are endless and there is a lot of profit to make. You can also have a part-ownership of a broad array of various properties. It provides you with diversification that cannot be achieved with owning personal properties.

5) Investment Is The Business Of Rich

When it comes to real estate investments, things which do not matter are mentioned below:

  • how much money you have
  • what is your credit score
  • if you have credit cards or not
  • if you have any assets

You can start investing in real estate without worrying about above stated factors. Things which do matter is if you can get a deal on a good property, do you have the knowledge and are you capable? It is not a business for those who have loaded bank accounts. You merely have to to become skilled at basic handiness that allows you to converse with investors. These investors will lend you the money to invest in the properties. See? It is not that hard.

Looking for more advice and information on real estate, check out our other blogs here.

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