​The Truths Behind the Biggest Investment Myths

The real estate industry is full of myths and mistruths. There’s a lot of misinformation out there, and unfortunately, I see a lot of would-be investors who buy into it. Their careers are dead in the water before they’ve even taken off, and all because they’ve been misinformed. 

Here are some of the biggest myths in the business:

Myth #1 - You have to be rich to be an investor.

Reality: Total horse pucky! I know plenty of investors who are not rich, or even close to rich. Of course, the definition of “rich” varies from person to person, but I think we all have a general idea of what it means to be wealthy. Most investors I know are average, middle class people who have simply managed their money well and have purchased investment property in order to maximize their income. They’re not honcho bigwigs sitting in the penthouse tower and bossing people around. They’re just regular people with regular jobs, who happened to have made smart investment decisions.

Myth #2 - It works the same as on TV.

Reality: This couldn’t be further from the truth. TV is, well, TV. What you see is not the reality. On most of these real estate shows, they make it seem super easy. What they don’t go into, however, is all of the behind-the-scenes stuff that real investors do. Stuff like setting up LLCs, going over a hundred different calculations to ensure profitability, working with difficult tenants….none of this is shown on the program. This stuff - the real stuff - isn’t glamorous enough, so they edit it out.

Myth #3 - You will be required to perform manual labor.

Reality: Not unless you want to. If you own a rental property, there will definitely be manual labor that will need to be performed from time to time. But who says you’ve got to be the one doing it? Sure, there are plenty of investors out there who do. They act as their own landlord/property manager, and they unclog toilets and mow lawns and paint walls. But there are just as many investors who hire that work out, and you can, too.

Myth #4 - Once you find tenants, you can kick back and just let those rent checks roll in.

Reality: Hahahah. Let me say that again. Ha. Ha. Ha. Seriously, this is funny. There seems to be this silly belief that once you get a place and get it tenanted, the hard part is done. The truth is, there’s still plenty of work to do, and it ain’t easy. You’ve got to deal with these people now! This means handling rent collection, late or non-payments, tenant problems, maintenance, vacancies, evictions, property inspections, and on and on. Now, to be fair, if you’re using a great property manager, they’re going to handle this stuff for you. However, there IS a pervasive belief that once a place has been leased, it’s as easy as waiting for those monthly checks. And that’s simply not true.

Myth #5 - Real estate is too risky; the market can’t be depended upon.

Reality: Real estate is one of safest investments you can make. The stock market is much more volatile, and things like savings accounts and CDs just won’t give you the return you want. Yes, real estate can be risky. But if you educate yourself and learn to make smart investments, your risk plummets while your profit potential skyrockets.

There are lots of myths in real estate, but if you want to succeed, you can’t let them hold you back. Learn the ins and outs of the biz, find a market that’s performing well, and don’t make rash decisions. Don’t miss out on the action because you’ve bought into some silly misconception.