5 Real Estate Investment Myths Busted

It’s a tough hump to get over from thinking about investing in Real Estate, to actually pulling the trigger. It is always a risk, but as they say, there’s no reward without risk, right? And the two are usually directly proportionate. It takes a lot of research to be successful at REI, but once you’re well informed, and have a good team of professionals assembled, go ahead and jump right in, the water’s fine! Here are a few myths that may be keeping you from taking the leap:

1. 1.You have to be a millionaire to invest in Real Estate

This is absolutely untrue, there are a lot of financing opportunities out there to get you started. Talk to a good mortgage banker or broker to see what your options are. If you’re looking to buy and flip, hard money lenders are also a good option. They’re short term, high interest loans, but with the right property and planning, you should only have to make a couple payments before re-selling and paying off the balance with profits in your pocket.

1. 2. It’s tough to find a property you can actually profit from

The truth is, you just need to be well informed. Choose a specific area or two to become an expert on. Watch the market there for a few months so you’re familiar with what properties sell and rent for, and find a Realtor who’s well versed in Investment properties. With all of these components, you should be able to make a well informed decision (take a calculated risk), and end up with either monthly income and equity, or profits from the sale (proportionate reward).

1. 3.Property values are going down

According to the latest Forbes forecast, they “expect home prices to be up about 5% for the calendar year”. -Mark Fleming, chief economist at CoreLogic, an Irvine, Calif.-based real estate data firm. We experienced a steep hike in property values in 2013, at 11.5%, the second highest since the Real Estate bubble in 2005. The appreciation has slowed, but is still on the upward climb. To quote Forbes Magazine again, their “3 year growth forecast = 41%” in Mesa, Scottsdale, and Phoenix, Arizona. With the right approach, there is still money to be made in the Real Estate market.

1. 4.It’s really expensive to rehab a property

This can be true if you don’t plan for it, and do your research on the property first. Set aside the amount you can afford to spend on rehab, or getting the property “rent ready”, and consult a contractor before making an offer. This way there are as few surprises as possible. If you over-estimate your rehab costs, you should be able to come out under budget.

1. 5.Owning rental properties is a huge pain in the (you know what)

Also a myth when you have a good Property Management Company. Investors who find the right company for their needs often don’t have to worry about their property or tenants at all. The Property Management Company will handle all the marketing, leasing, rehab, repairs, tenant calls, and everything else that comes up as a part of being a landlord for a minimal fee. A great Manager is well worth it for you to just sit back and collect the checks. As a result, you’ll have passive income, and equity building for the future.

Don’t let your fears get in the way of building wealth through Real Estate. If you find the right team to help you along the way, it can be your path to financial freedom.