For many people, investing in real estate is a great way to diversify their portfolios. When the stock market is down, real estate is often less volatile. Plus, the idea of a steady stream of additional income is appealing to everyone.
You may be tempted to do the same and begin investing in real estate.
But before you take the dive into real estate investing, there are a few myths you need to know about. Understanding these myths will help you avoid common real estate investing mistakes.
Here are 3 real estate investing myths that every investor should know.
1. It Costs a Lot to Begin Investing
The first of the popular real estate investing myths is you need a lot of money to begin investing. When you invest, you expect to get returns from your investment, enabling you to pay your mortgage over time.
But you don’t have to invest alone. You can always purchase a property with an investment partner.
If you don’t currently own a home, you can look into programs and loans for first-time home buyers. The criteria for these mortgages vary, but many require only a 3% downpayment.
That said, saving money for a downpayment is always a good idea. If you can do it, it’s recommended.
If you have any existing debt, consider paying that down before you begin looking for investments. Not only can it help you get a loan, but it can ease some of your financial stress.
2. Fixer-Uppers Are Where the Money Is
The proliferation of reality television has led to dozens of programs that feature home flipping, renovations, and fixer-upper homes. But these “reality” t.v. shows are anything but real.
While buying a property, fixing it up, and selling it later can be profitable, there’s no guarantee. Along with the cost of repair and labor, you also need to calculate the cost of a home inspection for each property you purchase. In the event of a real estate market crash, you either hold on to the property until the market recovers, or you sell it at a loss.
3. Being a Landlord Is Time Consuming
Being a landlord can be both challenging and time-consuming. This is especially true if you have difficult tenants.
However, it doesn’t have to be that way. There are many aspects that you can outsource to a third party who will handle things for you.
A property management company like HomeRiver Group can manage everything from marketing your home to leasing and maintaining it. Having a property manager can also aid you if you decide to move farther away from the property or are looking to own in a market outside of your local market.
Make HomeRiver Your Partner in Real Estate Investing
HomeRiver Group offers world-class property management. Whether you’re an experienced investor or new to real estate investing, we can make the process easier for you.
If you need help managing or marketing your Idaho property, or if you need local brokerage services for your buying and selling needs, contact us today.