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Myths and Facts about real estate investments

Posted by HappyHomes on July 28, 2022

There are several real estate investment fallacies, yet buying real estate is a significant step toward financial freedom. Real estate investment may be both exciting and perplexing for novice investors. Even after thorough study, it can be challenging to separate reality from the false information that is circulating online.

There are several myths regarding real estate investing that shouldn’t sway your choice to engage in the real estate market. Especially if you’re new to the game, this is difficult. It might be challenging to distinguish between myth and reality given the numerous misconceptions that have crept into the real estate sector. Although certain misconceptions may appear innocent, they might nonetheless prevent you from succeeding in the real estate industry. Major errors are not excused, while little ones are. Therefore, it is necessary to recognise the misconceptions and discover the reality about each if you want to thrive in this industry.

Myths about Real Estate Investing

Myth 1: You Need a Lot of Money to Start Investing in Real Estate

One of the biggest misconceptions about real estate investing is this one. People believe that purchasing a house requires a substantial number of money. In actuality, beginning investors don’t require a considerable quantity of capital or a 20% down payment. It is absolutely not necessary to have the funds for a big deposit, though it certainly helps.

Money may undoubtedly advance your career. However, there are instances when you’ll need more than just money for your real estate endeavour. To put it another way, having a lot of money is excellent, but investing in real estate doesn’t always necessitate it.

So, how exactly does it operate?

In 2021 alone, 30% of U.S. house transactions were completed in cash, according to a Redfin Corp. study of county statistics, which was cited by Bloomberg. This proves that buying cash rather than financing a house is more advantageous for the buyer.

However, you should be aware that you’ll need enough rental revenue to meet the mortgage charges if you’re truly concerned about being able to support yourself financially while in the real estate industry (along with additional property expenses). Apart from that, having a lot of money isn’t really a need as long as you can support yourself.

Myth #2: Perfect timing is everything

The fact is that there is never a good moment to make an investment in the housing market.

Even while there’s a potential you’ll invest at the incorrect moment, that doesn’t imply you have to be spot on with your timing. In actuality, timing will vary depending on your circumstances. The following examples may be relevant to you:

Money issues (whether from job loss, changes in pay, unfortunate circumstances, theft, etc.).

make ends meet while residing in a modest house.

received a sizable inheritance from someone.

Have a well-paying career, and your financial situation is excellent.

just relocated from your parents’ home.

Perhaps you’re dealing with personal debts.

Whatever your circumstance, you should think about the following things before making a real estate investment:

monetary security

emotional health

Your place of residence

Your familiarity with purchasing a home

Additionally, how well you know about house remodelling, etc.

These elements will demonstrate to you if you are prepared or not to make real estate investments. As a result, time differs depending on the individual.

Myth #3: Only city properties should be chosen by investors.

It could seem profitable at first to invest in city properties if you had any desire to do so. However, since you wouldn’t be the only one looking to invest in urban homes, investing in real estate in the city might really be highly competitive. Additionally, many first-time investors may find themselves priced out of the urban real estate market when metropolitan homes’ values increase.

Fortunately, one may still make money investing in real estate even if they choose to do it outside of the city. Nearly half of millennial homeowners, according to a research by the real estate firm Zillow, prefer the suburbs. The suburbs and its surrounding areas will continue to increase as the housing supply in metropolitan centres decreases and tenants confront rising rent costs in the metropolis. Investors should thus think about purchasing real estate in these areas.

Myth #4: It’s Easy Money To Renovate A Fixer-Upper

Numerous TV series have addressed the topic of fixer-uppers. If you’re not familiar with the term “flipping a house,” it basically means purchasing an investment property with the intention of selling it as soon as possible for a profit. Homebuyers may occasionally observe the house market’s increase in value before making a purchase when the moment is perfect for them. Then, after a year or less, they will sell the house (the fixer-upper) for a sum that is often more than what they paid for it. Sounds like a prosperous way of life?

Myth #5: Invest in rental properties first, then become a home owner.

In actuality, buyers of real estate want an emotional bond with the house they choose. Purchasing a home or other property is no longer seen to be a “mature” decision, as 38.1 percent of US homeowners in the first quarter of 2021 were under the age of 35, according to Statista. Home purchasers want to be sold something that will satisfy their emotional and financial demands since they have their hearts set on that “special home” and money on the line.

Myth #6: Being a landlord requires a lot of time

Do you have time to manage a rental property? Everything will rely on your circumstances, including your financial status, your time commitment, etc. While working in real estate might take up a lot of your time in certain places, it might not in other.


According to a National Association of Realtors research, the housing market interests millennials in 99 percent of cases. It is critical to separate good information from false views since more young people than ever hope to invest in real estate.

As you can see, there are a lot of nuances to real estate investing. Whether you like it or not, the ins and outs may give rise to a lot of falsehoods. However, don’t worry! Now that we’ve discussed some of the most prevalent fallacies surrounding real estate investing, it is important to approach them as just that—myths

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