Real estate investing is unarguably one of the greatest ways to make money. Today’s markets are full of opportunities all across the nation. So, what’s stopping investors from jumping into real estate? It’s a lot of reasons, but many are only myths. We’re here to debunk the 6 most popular myths in real estate investing, because it’s not always about what people say.
#1 You need a lot of money to invest in real estate
This is the biggest and most common myth in real estate. I mean, you obviously do need money for real estate investing, but many real estate investors, or investors-to-be, do not realize how manageable saving for investing is. There are a lot of ways to save money to buy an investment property. Start with knowing how much money you need, through cutting expenses, to putting away income and budgeting, you’ll end up with actually saving money.
You may also want to think about investing in real estate partnerships. If at first you do not have sufficient financing means, investing with a real estate partner may prove effective. Real estate partnerships are great because not only you get financial aid from another investor, but you get to benefit from his/her experienc, as well as his/her associates – allowing you eventually to better connect with like-minded individuals in the real estate world.
#2 You need to be an expert to invest in real estate
Another popular myth is that you need to be an expert to invest in real estate, or that you can’t invest when you’re young. On the contrary, real estate is in fact one of the careers that you can get into whether you’re fresh out of college or whether you’re retiring.
Getting into real estate investing has become especially easier today due to the mounting number of resources both online and offline. You have real estate websites like Mashvisor that make real estate investing data accessible and reliable. Additionally, investor circles have grown to the extent where it’s become easy to make connections with other real estate investors and gain knowledge and experience of others. So, if you are indeed considering real estate investing, don’t let this myth discourage you from doing so. Once you’ve taken the first steps, you’ll accumulate experience and become a smart real estate investor in no time!
#3 It doesn’t matter who occupies your investment property as long as it’s not vacant
One of your goals as a real estate investor is to always keep your income properties at the highest occupancy rate possible. But that doesn’t mean that you should choose just any tenant to live in your investment property. You should learn how to choose tenants from a pool of applicants. And sometimes, it’s even better to leave your property vacant than to have tenants that may cost you more than they are profiting you.
In the end, it does matter who occupies your rental property. So, make sure to be careful with whom you select, it will end up saving you a lot of money and effort. This is especially true for traditional rentals, where tenants are long-term occupants. You can be less picky when it comes to Airbnb tenants, or guests, since they’re only there for a few days or weeks at a time and you are less committed to them.
#4 Airbnb is not a safe investment
Who said so?
Airbnb is a very safe and profitable real estate investment, if you invest smart. In fact, for some neighborhoods and cities, it’s better to invest in Airbnb rentals rather than traditional rentals. To tell the two apart, make sure to use Mashvisor for information on the optimal rental strategy to use in each city and for a specific neighborhood as well. Using Mashvisor allows you to obtain data on specific properties, expected average rental income, expected CoC return, ROI,and cap rate, among other real estate investing indicators.
According to Mashvisor, Indianapolis, Columbus, Las Vegas, Memphis, Oklahoma City, and Nashville are among the top cities for Airbnb investments. On the other end of the spectrum are Denver, Oakland, Atlanta, New York City, and San Francisco. These cities have had their fair share of legal battles with Airbnb which has made them more challenging to invest in. They are still quite profitable, but it is recommended to invest in the former cities if you are pursuing an Airbnb investment strategy.
#5 Real estate is an easy way to make passive income
Real estate investing is indeed a way to make passive income in the sense that you don’t have to show up to a 9-5 day of work every day. At the same time, it’s not like you’ll be sitting at home waiting for checks to roll in. After all, real estate investing is a business. You will have to do a lot of work including choosing tenants, tending to their needs, renovating the rental property between tenants, possibly managing multiple properties,and marketing your investment property, among other tasks.
#6 Location doesn’t matter
I mean, this shouldn’t even be on here. Everyone knows location is everything in real estate investing. Location affects the value of your investment property, your occupancy rates, and how much money you can make, among other factors. When looking into location, you need to consider factors like population growth, job growth, the tourism industry, proximity to amenities, etc. The more available these factors are in the location you choose, the better your real estate investment will be.
What should you take from all of this?
All in all, we’re not saying that real estate investing is a walk in the park, but there are definitely many false myths attached to it that aren’t true. Are you an investor? Do you know any other real estate investing myths that you’ve found untrue? Let us know!