There are a number of deeply flawed myths and platitudes about investing in real estate.
These are thoughts that come from a lack of information, because not everyone knows how the real estate market actually works.
Read on and learn the 3 myths and realities that every good investor should take into consideration.
The Meaning of Investing in Real Estate
Investing in real estate is not just about buying property. In general terms, it is about making your money grow, protecting your investment with something physical and useful:
Physical, because unlike other investment methods, a real estate investment is an asset supported by a property and its derivative rights.
So even with market fluctuations, the investment will always be there.
Useful, since, unlike other investments that involve betting on unproven business models, real estate investments are based on satisfying one of the oldest and most common utilities: housing.
Therefore, if you want to invest in real estate, you first have to buy a property or be part of a real estate project; to later lease it, either on their own or through a real estate operator.
In this way, you will obtain a fixed income and, in parallel, your property will revalue over time.
What Type of Investor Bets on This Model and What Are You Looking for
There are different types of investors for each investment. Generally, those who want to invest in real estate are people who are looking for stability.
Small or medium investors, who are not so interested in the uncertainty of other investment models.
And it is not that these are people who are denied trading, buying stocks or seed capital.
The real estate investments do not compete with those other investment models. What happens is that they are people who are looking for long-term solidity.
3 Myths About Real Estate Investing
But, you may wonder why, if it is something so stable and secure, many still fear real estate investments?
In part, because misinformation on the subject leads many to believe in myths and falsehoods about this sector.
For this reason, we present you 3 of the most harmful myths that hold people back when it comes to investing in real estate:
1. It takes a lot of money to invest in real estate
Perhaps it is due to the number of people who have spent years paying for their housing. But it is not entirely true that to invest in real estate you must have a lot of money.
The options for small investors are very varied. You can acquire a property through a bank loan or through a small investment in Collective Investment Funds.
The important thing is to choose the type of investment that best suits your budget.
2. Rental Income Covers All Costs
This is a myth, but also a mistake. It is a myth because many think that when investing in real estate will not be necessary to make any effort and that the money will come by itself. Which represents a serious mistake.
Real estate investments require maintenance, which causes expenses that must be considered. Otherwise, you can make bad calculations of the income you will receive from the rent and go into debt.
3. Today is not a good time
Thinking that you have to wait for the prices of the real estate market to change, ignoring that investing is a long-term matter, is also another recurring myth.
By making the right moves, making the right calculations, and receiving the services of specialists in the field, any time is a good time to invest in real estate.
3 Realities About Investing in Real Estate
If you’ve made it this far, you already know that there are several misconceptions. Do you want to know what are the realities of investing in real estate? Discover them below:
You do not need to take care of the administration
Not only is it not necessary, it may not be the most convenient. Precisely because errors like the ones we discussed in the previous section can be fatal for you.
Putting your investment in the hands of specialists is the best way to take care of it.
Real estate business developers are trained to do the best management of your property. They will deal with the contracts and their possible breaches. Also, they will ensure the payment of rents and maintenance expenses.
Property Management is a Long-Term Process
Get rid of the myth of instant wealth. Investing in real estate is making a long-term bet. Without long-term meaning years of losses, quite the opposite.
When you talk about the long term, you should not think about losses, but about stability. An investment that generates constant income for years is a stable investment.
The best thing is that it is not only amortized with the payment of the rent; but also that over time it appreciates. Once you learn to be patient, you see the results.
Ease of Monetizing When Investing in Real Estate
Being held in something physical and real, investing in real estate is one of the easiest to monetize. If at any time you need liquidity, you can get it without problems.
Hence, it is one of the safest forms of investment that exist.
Bottom line: myths are many and can lead to disorientation. The realities, on the other hand, help us to have clear information about the real estate investment process.
To make a successful investment, the key is to break myths and acquire true information. In this way, you will be able to make a safe, easily settled and stable investment over time.