Generating positive cash flow with real estate investing has always entice people. Even during the time of recession, I have seen people investing in real estate. They find it more secure and valuable as compared to the other forms of investment.
With time, it has become a source of generating passive income for investors, which allows them to achieve financial freedom eventually. But if you are an investor or planning to be one, you’ll need to be aware of some of the misconceptions and myths before you start investing.
- 0.1 4 Real Estate Investing Myths Exposed
- 1 GC Realty Investments Free Report
4 Real Estate Investing Myths Exposed
Myth #1 – You don’t need to put any money down
Fact: No matter how good your deal is, you’ll have to have some of your own money to invest. Yes, you can find conventional or private lenders to finance your deal but you’ll need cash for property evaluation, closing costs etc. Therefore, you need to have some savings apart from your regular expenses for investment purposes. This doesn’t mean that you invest everything you have. If you don’t have enough money, it’s a good idea to wait. There are many good deals out there.
Myth #2 – You don’t have to do any work
Fact: Yes, there are different real estate investment options out there but this doesn’t mean that you don’t have to do any work. If you are busy, turnkey real estate investment could be the best option for you where your turnkey provider will find the property, rehab, rent and manage it. But then also, you’ll need to find a company that you can trust, check the properties in person and get in touch with them on a bimonthly or monthly basis to get updated.
Myth #3 – You need to learn everything about real estate investing before buying your first property
Fact: You might have heard this from a lot of gurus and self-proclaimed coaches. The fact of the matter is, if you want to learn about real estate investing, get out in the field and buy an investment property. There’s nothing better than a practical example.
This doesn’t mean that you just get out of bed one day and close a deal. It’s important that you learn the basics and get some tips from the people you trust. You don’t necessarily have to pay hundreds and thousands of dollars to learn investing. Forums like Bigger Pockets provide all those tips for free. Read the blogs, post questions and seek help from investors who are actually working in the market
Myth #4 – Buying cheap properties to limit the risks
Fact: Buying cheap properties in the initial years of investing seems like a good idea because there’s less risks involved. But that’s not always the case. You might buy the property cheap but there are chances that you end up spending much more on repairs. Cheap properties usually require a lot of work. Some of these properties are in a shady neighborhood, which causes trouble in finding the right tenant. Therefore, it’s always a good idea to keep three things in mind while buying your investment property:
- Cost of Repairs
- Final return on investment
Have you encountered any of these myths during your investment career? Share your feedback with us in the comments section below!
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