Maybe we’re just inexperienced and have been going with our gut feeling. It could be that our intel is just old and outdated, and it’s not doing our investing career any favors. Whatever it is, we can all get tripped up by bad financial advice and investment myths.
Whatever it may be holding you back from your best financial future, we’re here to tear down some of the common investment myths so that you can fulfill your potential.
A lot of people hold to the misconception that you must be wealthy in order to invest in real estate. You don’t! What you do have to be is smart with your money. The cost of entry to something like turnkey real estate investment can be intimidating for some people, we won’t lie. However, you don’t have to be rich to get the job done.
What it takes is an ability to strategically plan and save in order to make the commitment to invest. You have to decide that is something you want to do and then adjust your financial strategy so that you can make it happen. Here’s the truth: not everyone can invest the moment they decide they want to do it and that’s okay.
It’s far better to recognize that it is not fiscally responsible to clear out your savings account to invest and wait than to make a big financial misstep.
You don’t have to be wealthy or even out of debt before you start to invest. You just have to be smart with your finances. What can you handle? What can you do while still giving yourself smart margins and savings? Investing is not beyond your reach.
Related Article:Busting 5 Myths About Generating Passive Income in Real Estate
Whether you’re looking to someone else’s success or trying to replicate your own big wins, it’s always a mistake to try to use past experience to create rules or predictors for future performance. You can use your experience to learn, grow, and influence future decisions, but what other people experience and even your own experiences should never be used to create false guarantees.
Just because one investment did well, one market did well, or one deal or strategy went well, doesn’t mean it will work that way again. Use your experiences to inform, not to predict.
Some investors seem to only want to put their energy into the investments that promise large returns. While this compulsion is understandable, it ultimately is flawed. The investments with high returns are in reality those with the highest risk. This means that if you pursue all high-risk endeavors, you will likely lose more than you gain. It is not a sustainable strategy.
A better path is to comprise your portfolio of more reliable investments—not necessarily the lowest risk and smallest returns, but balanced investments. You want to be able to rely on your portfolio to bring you passive income. Then when you are generating income without too much risk or stress, then you can begin to take chances on riskier investments as you see fit.
One obstacle that prevents many new investors from taking their first steps in real estate investment is a need for bank financing. They feel that if they have bad credit or too much existing debt, then they might as well forget about it. Capital is enormously important to invest in real estate investment, but you don’t have to secure financing through a traditional lender.
Private money lenders are an excellent alternative and one of the best open secrets in this business. Raising private capital is a skill every investor should learn if only to know how.
New investors especially seem to be nervous about investing in markets that they have never been to. Investing out-of-area, however, can be the best move you can make as a real estate investor. Whether you’re investing overseas or in another state, picking a market that plays to its economic strengths, maximizes your dollar, and capitalizes on opportunity is always wise.
You have to look to areas that are growing and bursting with investment opportunities. Where you are might not fit the bill or be affordable. When you partner with a turnkey company that comes with a trusted property management team, there’s nothing to fear in venturing outside of your market.
Too many inexperienced investors start with one or two properties and decide that that’s plenty for them. They never grow their portfolio beyond that handful of one, two, maybe three properties. While any investments are better than no investments, owners can’t expect this to bring them true wealth or financial freedom.
This only comes when you truly diversify and multiply your streams of income. We’re talking five or more properties, and then some! Wealth comes when you really value and prioritize scaling your portfolio: not when you’re content with the bare minimum.
Looking for a turnkey company that truly values building a successful investment portfolio with you? Look no further.