There are plenty of myths surrounding investing in real estate that keep people from doing it, but they don’t have to. Listed below are the myths and the truth about those myths. Hopefully it will shed some light on the subject and make those who are worried about investing less nervous.
1. Lack of Cash
Everyone thinks that you have to have money in order to make money, but this isn’t necessarily true. If you talk to someone who has been in the business for a while, they will tell you about the times when they didn’t have any money yet still were able to buy a house. If you can find a great deal, you can find people who will go in with you and be your partner.
2. Lack of Time
Another misconception is that you need to have a lot of extra time on your hands in order to invest in real estate. The truth is that if you don’t watch television you will have the time that you will need to become a real estate investor. Instead of staying home on Saturday, go around looking for houses that are ugly and are for sale. Get the kids to help – they’ll really want to do it if you tell them that it will help them go to Disney World.
3. It doesn’t work
There are plenty of people out there who would offer evidence to the contrary for this myth. There is always risks involved in anything, some of them might really happen to you, and others are so remote that you shouldn’t worry about them.
4. Too many people, too few houses
One thing that people think is that everyone else is buying houses and there aren’t going to be any good ones left. The truth is that there are always going to be good deals out there for whoever is interested in them. There aren’t going to be a shortage of houses that need to be fixing up at any time in the near future, so that shouldn’t be something that hinders you from investing in real estate. There are plenty of deals out there – you just have to find them.
5. My market isn’t right
There isn’t a market that it won’t work in. Some are better than others, and they all work differently, but no matter when you invest or where you invest, you are going to be able to make money with real estate. You just have to find out about your particular market – the bankers, the trends, the rents, the title companies, and the rents. Once you have done that, you can study the techniques, and then adapt them to the market you are living in. A hot market means fast selling and riding inflation, a down market means bargains. No matter what the market is, there are always going to be financial problems which mean bargains for you.
6. We’re in a recession
Just because the country may be in a recession it doesn’t mean that you can’t still invest in and sell real estate. It just means that you have to become creative with how you are dealing with it. You can still buy houses. Buy the house at a great deal below market value, and sell it for a price that is only a little bit below market value. You can also offer perks to people who rent from you. Who wouldn’t love free basic cable television?
7. Real estate agents will hate me
The truth is that you might find that your real estate agent will be a great help to you. They can find you the deals that you may not know are out there, and they are willing to help you. Talk to some real estate agents and tell them what you are looking for. If you let them know that you are here to stay, they will help you out because they so rarely have repeat customers and will appreciate the business.
8. My credit is lousy
You don’t have to have good credit to be able to buy real estate. It helps, of course, but it’s not a must. There are plenty of ways that you can buy real estate without having good credit. There’s owner financing, flipping properties, lease/options, and other techniques that will let you purchase real estate without having good credit. Another option is to use a partners whose credit is good and borrow ‘hard money’, and that also doesn’t require good credit. If you use one of these options then you can work on getting your credit back up so that it will be an asset for you in the future.
9. Real estate investing is risky
When you compare real estate investing to other forms of investing, you will find that it’s the safest type of investing that you can do. The stock market is unpredictable and you can’t control how it works. A money market account, savings and CDs won’t ever give you anything to speak of in return. In order to make money you have to take some risk. When you do your homework and take time to educate yourself, you’ll find that real estate really isn’t that risky. But you don’t’ have to know everything there is to know before you start.
10. I don’t know enough
You know enough to get started. You don’t have to know everything. In fact, you will never know everything there is to know about real estate investing because you never stop learning. But the truth is that you do know enough right now.
Now that we have told you some of the myths that are associated with the real estate investing business, we hope that you will consider trying it out. You really have nothing to lose.