Everyone knows investment is necessary if you want to build long-term wealth. You simply can’t get to a level of wealth that is sustainable without investing some of it to make more.
As far as investment options go, investment in property is considered the most advantageous and potentially lucrative. While many people feel somewhat intimidated by the idea of investing in real estate, it really isn’t all too hard to get started.
If you’re uncertain about investing in property, it can help to build a foundation of information first. There are a lot of myths out there about property investment, and dispelling some of them can help to make the prospect of investment feel a lot more doable.
What do you need to know before putting any money down on real estate property? Read on and we’ll walk you through the basics.
It’s Important to Invest Close to Home
Some people will tell you that the ideal investment property is one that is located in your own town, possibly even your own neighborhood. Often, the idea is that being able to drive over and check in on your property is well worth whatever other opportunities you may be letting slide.
The truth is? If you really want to maximize your investment options, it can actually be a lot smarter to look outside of your neighborhood, and potentially even outside of your own state.
If you’re building up a portfolio of real estate options, you’re actually turning yourself away from many exciting opportunities if you only look close to home.
Investing out of state might require the help of property management services, but if you’re going to ever own more than one piece of property, you’ll likely need this kind of help regardless.
Investing out of state allows you to reap the rewards of areas with higher rents, without having to pay to live within those areas yourself. You’ll also have a convenient place to stop in and visit yourself when the property isn’t being rented.
At the end of the day, while there are some advantages of investing within your own town, this is a bit of advice that is a bit too limiting. Forget this myth and look outside of your surroundings and you’ll be sure to find a better deal.
Only Wealthy People Can Invest in Property
We all know that most real estate properties can be expensive. However, there is a persistent myth out there that you need to be extremely wealthy in order to take advantage of this form of investment.
That just isn’t true!
There are many different ways to finance a real estate investment, and many of them are accessible to even those who might not have huge swaths of cash to their name. FHA loans, for example, are a way that many are able to afford investments in real estate and don’t have to deal with absurdly high costs.
You’ll want to think smart and be financially sound when investing, of course. However, if you wait until you’re a billionaire to start investing in real estate, you’ll probably never actually get started at all.
Doing your research and figuring out the most affordable ways to finance real estate investments in the area in which you’re interested? This can be extremely helpful in turning your dream of investing into a reality.
You Must Time Everything Perfectly
A lot of people say that you need to wait until the exact and precise moment to start investing in property. That sounds right and good until you realize that it’s nearly impossible to predict when this moment actually is.
No one has the magic ability to predict exactly what is going to happen to the market. No one can see the future. Yes, we can all do our research, and plan accordingly based on our findings.
However, this way of thinking can only go so far and easily stop you from taking advantage of excellent opportunities. It’s okay to lower your standards somewhat and enter the market at a ‘good’ moment as opposed to a ‘perfect’ one.
Rental properties tend to get more leeway than other forms of property, making them easier to invest in even during more uncertain times. Even if there is a downturn in the overall market, you’ll still be collecting rent, and thus will be more secure.
A dip in the market can always happen, but as long as you invest wisely in quality property, you should be able to make a sold investment in the long run.
Investment in Property is Passive Income
When people talk about passive income sources, real estate is one of the most common types of investment that get mentioned. Investing in property is somewhat passive, but thinking of it in this way can set your expectations all wrong.
The truth of the matter is keeping any property in quality condition, for yourself and your tenants, takes time and effort. No one should go into this process thinking that being a landlord is completely easy. There’s a lot to stay on top of.
As we mentioned, working with a property management service can help relieve the workload. It’s important to understand the work needed when you start investing, so you can make a plan to balance it all with the rest of your life.
Property Investment Tips and Tricks
An investment in property can be a great way to build your wealth and start expanding your portfolio. However, if you’re looking to get investing soon, you’ll want to dispel a few of the myths that surround the process.
The above are some of the most common investment myths that you’ll want to get clear on.
Need more personal finance advice and info? Need help running a new property investment? Give us a call anytime for assistance.
