If you take the time to immerse yourself in the long, winding paths of business websites and associations on the Internet, you are saturated with ideas and strategies for investing in real estate and making it passive or semi-passive. income.
While real estate is certainly a useful way to create wealth, there is a lot of misinformation on blogs, forums, and even courses and books. You can be sure that you have achieved all the truth by carefully examining the information and checking the information with other sources.
Investing In Real Estate Myths Will Lead You Astray
Myths aren’t always malicious. For the most part, they’re simply bred from misinformation. And the longer they’re permitted to flourish, the more rampant they become. So it is with the following real estate investing myths:
- Just Find a Property Online
So many people seem to think that you can just look at Zillow and find real estate, call and be a real estate investor. But in reality, buying real estate is an important business and it requires a much more deliberate approach.
For starters, you won’t find a good investment property in Zillow. You will need to use other tactics – for example, driving for a dollar, joining an MLS or partnering with a wholesaler. Second, once you find the property you are interested in, you need to carefully inspect and secure funding, make recommendations, and negotiate. This can be a long process. (Don’t be surprised if you select multiple objects before you make a deal).
- You Need a Ton of Money
While some real estate investment deals do require tens of thousands of dollars to get some skin in the game, there are plenty of ways to invest without being flush with cash. Not only are there a handful of “no money down” tactics for those gritty enough to try, but you’d be surprised to learn just how little cash you actually need in order to use the power of leverage via strategic financing.
- It’s Totally Passive
Real estate can be a passive stream of income, but this is not the default setting. In order to make a Real estate agent in Chicago investment passive, you have to work hard on the front end and move with intentionality.
One way to make a rental property more passive is to hire a property manager. Many property management companies, like Green Residential in Katy, Texas, offer comprehensive services for a flat rate fee. This means you pay someone a set monthly/annual rate and get everything like tenant screening, property marketing, rent collection, and repairs/maintenance handled on your behalf.
- Fixer-Uppers Are Easy Cash (if You’re Handy)
HGTV has created a culture where people assume flipping houses is as easy as finding a cheap listing, installing some shiplap and quartz, and marking it up 200 to 400 percent. But that’s Hollywood, folks. The reality is that fixer-uppers require a lot of due diligence, strategic planning, and sweat equity. Yes, it helps if you’re handy, but you’re going to need a team of people in order to get in and out.
There’s nothing wrong with going the fixer-upper route if you’re genuinely interested, but don’t be misled into thinking you’ll make a $40,000 profit in three weeks. These projects are much costlier and more time-consuming than most realize.
- You Need to Own a House First
While it can be helpful to have some experience as a homeowner before investing in real estate, this isn’t a necessity. In fact, you might be better poised to generate income if you don’t own a home.
If you don’t currently own a house, this gives you the flexibility to purchase any type of investment. This includes a duplex or triplex, which permits you to live in one unit and rent out the other(s). In doing so, you can essentially have your tenant(s) pay your mortgage for you.
Another benefit of not owning a house is that you don’t have that added debt on your file. This typically makes you a more attractive candidate when applying for traditional financing.
- Where Do You Get Your Information?
It is important to know where you get the information and who you are reading, watching or listening to. The right sources of information will give you more information, and the wrong information will lead you to financial ruin. Always check the websites, blogs and podcasts you consume – and try to get information from as many different sources as possible. The truth is usually between extreme opinions and polarized hot opinions.
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