7 Myths about investing in Real Estate


Many people wonder: which is the best investment option under the present market condition? One of the best avenues to get your money’s worth would be real estate investments. But, unlike many other investment options putting money in real estate means investing a significant portion of your life savings. This is what makes many enthusiasts backtrack. Another reason for reluctance in real estate investments is the presence of so many misconceptions surrounding this sector. While some believe they need to seek consultation with real estate gurus before investing a fortune, others believe they need to have their own money or credit to purchase a property. Both these are myths far moved from the reality.

In truth, real estate investment is the best way to shun your boring and same job to carve a career of prosperity. With a bit of understanding into the sector, which generally comes with experience, you can always make it big here. While there are many perks of such investments, the only downside is the misconceptions which the common populace lives under. So, we are here to bust some of the prevalent myths regarding real estate investments.

Myth #1: You need a lot of cash or credit to start

Any real estate investor has this misconception. The belief is that you need to invest a lot of money to procure properties and then sell them for fair profits. In reality, though, there are many investors who do not spend a dime and yet earn high profits from the real estate transactions. As a real estate investor, you have to be an opportunist and clasp any buying or selling opportunity that comes your way. You need to build a list of leads for buyers and sellers alike. There is plenty of useful information out there on the web that would help you build such a list. Knowledge of the domain is the key to success, as far as real estate investment goes.

Myth #2: It takes years to be successful

Many believe that it would take many years to gain success as a real estate investor. Again, that is only a myth. Real estate investment is all about building relationships. From the very first day, you have to start building relationships and networks. You have to search for new sources that would help you create a large network. The quicker you are able to achieve this task, quicker you will be able to earn high profits from the investments. Building relationships and networks have become much simpler in today’s digital era than it ever was!

Myth #3: License is required for real estate investors

More than 90% of the common populace believes in this weird myth! The common misconception out there is that one needs to procure a license or become a certified agent to invest in real estate. This is absolutely wrong. You do not need any such credentials. Your job as a real estate investor is to buy properties at low cost from the sellers in trouble and sell them to other buyers who are in need of the same property. Why would you need a license for that? There are certain nations which have specific rules for bulk brokering, but small real estate investments do not fall under their periphery.

Myth #4: Banks are the only financing options

Most newbies into this trade believe that they have to visit the bank for all their real estate financing requirements. But banks do not work with people having too much debt or low credit score. If you approach a bank for two or more deals they will stop financing you. That is the way they work. So, private investors are the best ways to raise the capital needed for investments. Such investors again have their own norms. It is essential to arrange a deal that is mutually beneficial. You will be surprised to find the private investors more than grateful to invest in your real estate transactions.

Myth #5: You cannot fail

Many enthusiasts walk away from real estate investments, as they think failure will lead to doom! There is a common misconception that “there is no room for failure in real estate investment sector”. That is just the fear speaking. In reality, like every sector, you are bound to fail here too. And with each failure, you will learn new lessons that help you make better future decisions. There is always a way to overcome failure and losses. Let your fear of failure not cloud your future success.

Myth #6: It’s simple and fast way to make money

Then there are people on the opposite end of the spectrum, who want to make quick money. There are no shortcuts to success in this sector. You have to gain knowledge and earn the trust to be successful. It is only with experience that you can expect to make big profits. Though the concepts of real estate investment are fairly simple, it needs a lot of hard work and determination to build a career in this domain. Bigger players are using data, mathematics, and technology to capture the market you have to compete with them.

Myth #7: Opportunities are limited in small markets

Many believe that the success of a real estate investor is largely dictated by the market he/she operates in. While bigger and prosperous markets give you faster profit earning opportunities, small markets have fewer competitors. To gain success in the small markets, you have to be aware. Just think about it: there are investors in every small town and they are making good money too! If you are able to make right decisions on whether to hold, flip, build or lend it then you will be successful even in small markets.

Hope we have been able to clear your mind on some of the biggest myths surrounding real estate investments. Today, more and more people are using this opportunity to earn high revenues every month. Are you thinking along the same lines?

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