5 Common Real Estate Myths Holding You Back: A Guide for Investors
Before investing in real estate, it’s important to do some research to learn more about the process. However, while there’s plenty of valuable information about investing, there are also a few misconceptions to look out for. That said, learning helpful information and avoiding misconceptions is crucial if you invest in real estate for the first time. So, if you want to know some of the most common real estate myths and how they’re proven wrong, keep reading.
Contents of This Article:
- What Are Some Common Real Estate Myths?
- How Can You Start Investing in Rental Properties?
- What to Consider For Your Next Investment
- Boost Your Rental Income With Property Management
What Are Some Common Real Estate Myths?
Investing in rental properties requires time, money, and patience. However, several real estate misconceptions can make the process seem more complicated than it is.
Additionally, it’s tricky to separate fact from fiction if you’re learning the process for the first time. That’s why we’re here to review 5 common real estate investment myths that could hold you back.
- It’s Extremely Risky
- You Need to Be Wealthy
- Timing Is Everything
- Being a Landlord Is Too Difficult
- You Have to Own a Home First
It’s Extremely Risky
One of the most common real estate myths is that it’s extremely risky.
With that, some people would even advise investing in stocks instead of real estate since you never know how successful the property will be.
While evaluating the risks of investing in real estate is great, it’s also crucial to recognize the benefits. For instance, rental properties generate monthly income. So, instead of investing in stocks where the market constantly fluctuates, rental properties can provide you with consistent income.
You Need to Be Wealthy
Some people don’t even consider investing in real estate because they assume you need to be wealthy. Otherwise, they assume you need a massive down payment to buy a rental property. However, that’s now always the case.
Some investments can be costly, but several opportunities don’t require large sums of money. For instance, you can purchase real estate with an investment partner who can provide financial resources.
Timing Is Everything
Some investors assume you must find the perfect investment time to succeed. However, the truth is that there’s no perfect time to invest in real estate. Ultimately, it depends on your circumstances. For instance, you’ll want to consider your finances and familiarity with the process before you make a large investment.
When it comes to timing the housing market, finding the perfect time is challenging. However, you’ll want to research the market and take note of market predictions before you make an investment.
Being a Landlord Is Too Difficult
Becoming a landlord holds many people back from investing in rental properties. Some assume it’s too hard, time-consuming, or requires too much responsibility. After all, landlords must find tenants, inspect properties, collect rent, perform maintenance, and much more.
However, you don’t have to manage all your properties alone. Many successful landlords hire a trusted property management team to help ensure operations run smoothly at each property. If you think running a rental business seems too challenging, contact your local Northern Virginia property managers today.
You Have to Own a Home First
Another real estate myth that some people believe is that you must be a homeowner before investing in rental properties. However, there’s no truth to this statement at all.
Nope, there’s no homeowning prerequisite before you can start buying rental properties. In fact, some people start buying and renting properties while living in a rental. For instance, you can purchase a rental property that you live in and rent out simultaneously, like a duplex building.
How Can You Start Investing in Rental Properties?
Anyone can invest in rental properties despite any real estate myths you may have heard. Rental property investment doesn’t take wealth, homeownership, or perfect timing. Instead, it requires time and patience. After all, it can be lengthy, from when you invest until you have tenants living in your properties.
So, whether you’re investing in single-family homes, duplex buildings, or multi-family units, here are a few ways to prepare for your next investment.
- Look At Your Finances
- Research the Current Market
- Ask Questions About the Community
Look at Your Finances
Before searching for the perfect property to buy, step back and evaluate your finances. Before making a significant purchase, knowing what you can afford is crucial. Then, be careful so you don’t overextend your budget.
Additionally, it would help pay off any debts before purchasing real estate. After all, paying off your debt can help you get a loan and ease financial stress.
Research the Current Market
One of the most important aspects of any rental property is its location. As such, evaluating the current market and deciding the best place to invest is crucial. Find which neighborhoods are profitable and determine where you’d like to purchase. Furthermore, evaluating the current market can help you decide on a good investment time.
Ask Questions About the Community
After you’ve picked an ideal spot to purchase a rental property, you’ll want to learn more about the community and neighborhood. Luckily, there are several ways to get this information. For instance, you can visit the area, ask other investors, or reach out to community members.
Here are a few points to consider before making investing in a specific area:
- What is the crime rate?
- Where’s the nearest school?
- Is the neighborhood quiet or loud?
- Are there any nearby attractions?
- What’s the average rental rate?
You should be able to answer these questions before investing in a rental property.
What to Consider For Your Next Investment
After you’ve learned a bit more about the industry and how to avoid common real estate myths, there are a few extra considerations to remember. That said, here are a few tips for new investors to consider.
- Protect Your Finances- Most experienced investors will tell you to protect your finances. Additionally, they’ll let you know never to invest under your name. Instead, create a partnership or an LLC to secure your precious assets. Then, if something happens, your personal finances won’t be affected.
- Don’t Wait to Invest- Some people believe you must wait until you’re older and more established to invest in rental properties. However, starting while you’re young has several benefits. For instance, young professionals with the financial stability to invest can utilize a Federal Housing Administration (FHA) loan.
- Diversify Your Investments- Most investors look at single-family properties. However, it’s best to diversify your investments. Consider looking into commercial buildings, multi-family properties, vacation rentals, or other real estate types.
Boost Your Rental Business With Property Management
Don’t let real estate myths keep you from investing in rental properties. Whether you’re a first-time buyer or a seasoned investor, it’s important to differentiate between what’s true and what’s not. So, research and learn about the real estate market to successfully purchase your next rental property.
If you want to purchase more rental properties but feel like you have too much work on your hands, don’t fret. Your local experts, like Bay Property Management Group’s professionals, can help step in and boost your rental business.
BMG offers comprehensive rental management services in Northern Virginia, Washington DC, Philadelphia, and Baltimore. If you’re struggling to manage your rental business, contact BMG today to learn more about how we can help.