“How’s the market?” asks the man politely, hoping to sound interested in his acquaintance’s work as a realtor. For this polite but skeptical man has been around the sun a great many times, and real estate (as an investment) is all but a fool’s errand in his mind. To him, whatever can be gained in this boom will most certainly be lost before he knows it. As the man departs from the conversation, he reassures himself of his own cleverness. Burying cash in his yard has yielded much more value to his property than a risky investment ever could.
Such a parable paints the extreme end of the real estate skeptic’s spectrum. Nevertheless, all skeptics share a common thread, the fear of the unknown. Admittedly, real estate investing can feel confounding and downright perilous. However, clearing a path through the forest of misconceptions is a good place to start. Here are three of the most common
1. Myth-conception: Investing in real estate is for the wealthy.
Fact: Investing in real estate is one of the ways the non-wealthy become wealthy. The term “wealthy” is clearly subjective but use whatever metric you have in mind. By definition, a person’s wealth is simply one’s assets minus debts. Unfortunately, pun intended, many Americans are much better at compounding debts than they are at building assets. Real estate investing is one of the best ways to build massive assets at little upfront cost. Down payment programs that allow one to buy a property for as little as 3% down open up a world of possibilities for people that don’t have endless bankrolls.
2. Myth-conception: Investing in real estate is time consuming.
Fact: Investing in real estate can be as time consuming as you want it to be. Whether you are looking to handle everything from leasing to maintenance yourself, or whether you need some help along way, there are plenty of custom solutions that can fit your needs. For a first-time investor, the hands-on approach might be a great opportunity to learn the ropes. As one’s portfolio grows, it often makes sense to outsource management to save time and energy. We’d love to map out your best options, whatever your current position.
3. Myth-conception: Investing in real estate is not feasible in this market.
Fact: Investing in real estate is about using what the market gives you. Opportunities still abound for anything from a quick flip to long-term holds. The inherent risk is in the price you pay. However, the price you pay isn’t always the whole story. For the long-term investor, simply getting one’s foot in the door can be a win, even if it is in the midst of a seller’s market. If a property can cash-flow (through LTR or VRBO), you are building equity in an asset without continued cost to yourself. Identifying properties that give you this opportunity is not always easy, but we’d love to empower you with the tools needed to unlock such doors.