The real estate investing market is a complex and ever changing business community; this has made it a highly progressive industry where adaptability and up-to-date knowledge are musts for success. Unfortunately, these characteristics have also given way to a variety of industry myths pertaining to countless parts of the investing process. While it is almost impossible to pinpoint the exact origin of these assertions, one thing is for sure: they are both unfounded and detrimental to the industry at large.
That said, here are a few common real estate investment myths — along with answers as to why they are not true.
“Real estate investment is quick and easy”
Real estate investment is not a simple concept, though it can be easier to approach with proper experience and research. I previously explained how many new investors rush into the process without taking adequate time to learn — about market trends, applicable business models, and the like — and this frequent mistake seems to have spawned the myth that real estate investment is both quick and easy to master. The tough reality is that it will require effort and dedication to become versed in this unique artform.
“Use the past to predict future success”
As previously noted, the real estate investing market is an ever changing entity; its numerous moving parts are constantly adapting to modern trends and consumer demands. A successful investor should always be willing to learn from past mistakes, but with the aforementioned notions in mind, this method cannot stand as a reliable means of predicting future success. It is a harmful — albeit common — mistake to assume an upcoming investment will follow the exact pattern as one before it. Do not get into the habit of making reckless decisions based solely on speculation.
“Avoid risk at all costs”
It may not be smart to take huge risks early into your real estate investing career, but risk itself is not necessarily bad for seasoned investors — embrace it now and then and you may experience great success that may not have been possible without it. That said, it can be easy to associate risk with negative emotions like regret and anxiety, so mitigate your unease with quality research and layered thinking. Above all else, ask yourself if the risk is necessary and worth the potential reward.