“Investing in property needs a lot of money and only rich people can afford to do it.” This is just one of the many false ideas, out there, about property investing and it has spread like wildfire. If there’s one thing COVID-19 has shown us is how fickle our systems are, including those by the government. Besides now, there’s never been a better time for people to financially empower themselves and create their own opportunities. Through property investing, personal empowerment is possible.
1.Property investing is exclusive and type-specific
Some people are fond of the idea of creating wealth through property but are soon discouraged by believing this myth. This is especially true in black communities where the effects of apartheid are still felt today. While white people had exclusive freedom to vote, invest and move around freely black people, in their communities, were restricted on many different levels including economically. However, the idea that white people, rich people or very smart individuals are the only ones that can invest in property is obsolete and untrue now. Anyone with the determination, clarity and intentionality can do it.
2.Property is a get rich quick scheme
The belief that property provides some ‘overnight’ success is far from the truth. When done right, property investing does delivers on great benefits. But just like other businesses, it happens over time. Buying, selling or renting real estate for cash-flow or profit is a learned skill that only gets better with practice and time. You will need time to learn this skill, and possibly get a property registered in your name. In addition to this, renovating a house or securing funding can also take time. So, you should set achievable goals that are also still time-bound. Even if it’s possible to create wealth through property consider the fact that it takes time.
3.There’s not enough good opportunities
Whether it’s buying a specific property type – residential, commercial or land – there’s always an opportunity to invest in property. As the human population continues to grow, more and more people need living and working spaces. Plus having shelter is one of our most basic human needs. But is it possible to search for deals in an area and find none? Yes it is. In this case, the best thing to do is to search for areas with frequent buying and selling activities, and then zoom into one area at a time. To gain more insight about an area, drive around or walk about in the area, talk to local estate agents and check out the stats before making any financial commitments.
4.It’s easier than college so DIY
The difference between successful property investors and those who take chances is their understanding of the work required. For some, property investing is so easy it can be done singlehandedly and without any form of education or training. But the stress, loss and disappointments that comes with the do-it-yourself practice is avoidable. Though property investing doesn’t take you three or more years to learn, like a degree, you’ll still need to persist towards your goal to succeed. Looking for deals can be tough but it’s not as challenging as trying to do everything by yourself. Imagine if you had to look for deals, arrange a maintenance crew, deal with tenants and manage the admin of the finances of your property business all alone. Stressful right? The thought of a one-man show is overwhelming.
5.All debt is bad even if it’s used for investing
Well-known property investors such as Robert Kiyosaki and Donald Trump created wealth from property by using debt. With our different backgrounds; some of us were taught that debt is used for instant gratification while others were programmed to believe that all debt is bad. However, one of the most popular ways of getting funds to buy property is through bank loans. Other prolific investors, such as our very own Sylvia Milosevic, indebt themselves further because they leverage on their ever-growing equity. They use the loaned money to buy more property, grow their portfolios and create wealth.
6.Subsidizing a property is the only way to invest
Others believe that they can only enjoy benefits after years of property investing. In the meantime, after buying properties that don’t cash-flow enough to pay themselves, they top-up with their own money. Even when the rent money doesn’t cover all expenses they’re convinced there’s no other way. The truth is that there is a way to invest in property and make profit without subsidizing it. In fact, our experts emphasize the importance of making money from day one when investing in real estate. How? You can buy distressed properties below market value, fix them up to sell or rent out to tenants. This requires buying in the right location, negotiating with sellers and doing extensive research.
7.The value of properties always increases
This is a probability that cannot be guaranteed. When economies rise and fall, recessions come and go then property prices are affected. Many people lost their properties and money during the economic recession in 2008 because of this belief. But for those that invested hoping that they’ll start making money after some years were more disadvantaged. When planning to invest in property the best approach is to consider short and long term possibilities. Also, consider the area you’re investing in. Will there be growth in that area or not? How much are other similar properties going for in that neighbourhood? As an investor, these are some of the key questions you’ll need to ask yourself.
8.Property investing is time-consuming
Though it does require time and commitment, investing in property is actually not as time-consuming as some believe. If you have a team to help you manage and run your property business you can be more flexible with your time. Some people work their normal 9-5 jobs and work on their property businesses on weekends. Others leave their jobs to focus on property full-time. These possibilities will depend on your preference, goals and availability.
I need to have money to make money in property
I hear this all the time. People always think that they need to have money and a good credit score in order to buy a property. Yes, if you are only relying on the bank. They will ask for your pay slip, credit score and give you money to puchase the property but….what if the bank says NO! For most people that is the end of the story. However, this is where we come in.
Did you know that apart from the banks money there is at least 10 ways of funding your property deals? How so Milan? Well, can you find a property below market value, motivated seller, distressed property, person who is emigrating/relocating, pass the deal onto your network to someone who is looking for deals like that? YES! How about you charging 5-10% of the value of that property? YES! How about you partner up with the investors who are looking for deals like that, share the profit? YES! But Milan, I don’t know people like that!
Build your network and your networth will grow.
Would you agree that when you have access to deals like that, will be much easier to partner up with someone who is like-minded, who understands the value of property investing and who is looking for such deals? YES!
Options are there but to know them, you don’t need to have money but knowledge. Knowledge is power, but applying that knowledge will take you to the next level. There is a reason why more millionaires and billionaires are always created in recession times, because they were able to spot opportunities and take advantage of them. How to spot more opportunities? By getting the right knowledge.
The more you learn, the more you earn!
Ready to take action?
Fact is, there’s numerous property investors that have found success and built wealth by investing in real estate. You can also become one of them. As you have learned in this article, anyone can do it and myths are exactly that. You can start your property investing journey today with the guidance of our experts – register for our FREE online property investing webinar.