Real estate investing. Some may consider it risky, and some may think that they do not have enough money to get into the game.
However, real estate is still a popular option for investing for Americans. About 31% of those Americans think real estate is the best way to invest their money.
What if you are not part of that 31%? What fears are keeping you from getting skin in the game?
These are four real estate investing myths that you should be aware of.
1. You Need a Lot of Money to Invest
The first myth to real estate investing is that you need to have a lot of money in your savings account to get in the game. This is simply not true.
The only money that you need right away is a down payment. Most people may think that they need to have 20% of the house's worth ready for that, plus excellent credit.
Well, if you look hard enough, you may be able to find a mortgage lender that requires as little as 3% for the down payment. Plus, there are other loan options that you may have at your disposal going in as an investor.
2. Fixer-Uppers Make the Most Profit
Next, you may have heard the myth that fixer-upper houses are the best ones to buy as real estate investing advice. While there can be the potential of a big profit margin with these types of houses, you still need to do your homework.
In a nightmare scenario, you may discover an unexpected problem with the structure or the land. That can result in one of two things. Either the house can become a money pit, or you may end up not being able to sell the house at all.
Make sure you do your homework before buying property and that it is possible to fix the house.
3. Being a Landlord Is Too Difficult
Those that are not in the real estate business may feel overwhelmed at potentially being a landlord. No need to fear, as if you do not desiring having all of the responsibility of a landlord, you can simply hire a property manager.
A property manager can take over the day-to-day responsibilities of the land that you are renting out, and they can consult you about the upkeep that needs to be done for your property.
4. More Properties Equals More Money
Finally, some people assume that owning more properties at once will lead to more profit. However, this is not only the case.
People forget about transaction fees that go with each sale, so the more properties that are sold, the more that you will have to pay. Also, you need to consider that stretching yourself too thin could lead you to losing money on certain properties if you are not focused enough.
Start Your Real Estate Investing Today
These are four of the biggest real estate investing myths that you need to be aware of. If you approach this with your fears put to the side while remaining practical, it could be a great return on investment for you.
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