2 Common Myths Regarding Real Estate Investments
Posted on: 8 January 2019
From buying and flipping to buying and renting, real estate can be a great investment. Not only will it allow you to be your own boss, but investing in real estate can also earn you a decent financial profit. Unfortunately, most people are not sure where to start or they believe a few common myths that may make the idea of investing in real estate less appealing. This guide will teach you the truth behind a few common real estate investing myths.
You Need a Lot of Money
One of the first things you may believe is you need a lot of money to get started. Fortunately, this is not true, since there are many options and programs available to help you purchase a piece of property without spending a fortune.
Buying a foreclosed property at an auction or buying a distressed property are both excellent ways to make your dream of real estate investing a reality. In both of these cases, the property may need a good amount of work to fix up. However, selling or renting the home once it is repaired will most likely earn you a great ROI, or return on your investment.
Another option is to buy a home that needs work, make all the necessary repairs and restorations, rent it out for a period of time, refinance the property using the newly-repaired and higher-appraised value, and then pay off the existing loan. There will be a difference between the original loan and the loan of the higher-appraised value, which will actually become your profit.
Single-Family Homes Are Not Good Investments
If you are new to real estate, you may think buying a condo or apartment building is your best investment option. Although great investments, a single-family home is also a great investment to consider.
In most cases, the purchase of a single-family home will be higher, especially when compared to a mobile home or a condominium unit, but you should see a higher ROI whether you choose to buy and rent it or buy and sell it.
Many investors choose to purchase single-family homes in appealing neighborhoods, which make renting out the property or reselling much easier. Families will be more included to move into these homes, but they will also be willing to pay a higher rent or pay more for the home if they are purchasing because the home is in a desirable area.
If you are ready to invest in real estate, proper understanding is key. This guide will help you learn the truth behind a few common myths.
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