When it comes to real estate, there’s a lot of bad advice out there. And, unfortunately, a lot of people fall for it. If you’re thinking about buying or selling a property, beware of the following myths and urban legends. You might hear that you should always lowball your offer when buying a property or overprice it when selling. But, in reality, this is terrible advice. You could end up alienating the seller or buyers and wasting everyone’s time.
Realtors are usually the first point of contact for anyone at the beginning of their home-buying journey. You may think you’re doing your client a favor by giving them all of your expert advice on purchasing property, but it’s important to remember that they are paying you to help them find a home and not to decide what is best for them.
It’s pretty common practice in the real estate industry to give worse advice than you really need to know. A recent study by the Harvard Business School shows that companies are giving out over $100,000 in bad property advice. In fact, many commercial real estate professionals in major cities like Boston and Los Angeles continue to do a fantastic job of giving less than stellar advice that can make or break an investor, who is going to be left with a lot of questions like:
How can I afford this property? How much can I pay for it? What will happen if my net worth goes down? Is there any equity value for my investment options? And what about taxes? Where do we keep important documents like our loan agreement? Do they have access to other investors too?
This is just one of the things people go on about when they first start buying because no one knows how good the deals are. This isn’t anything new, we all want everything perfect:
- The deal’s price
- The deal’s terms
- The amount of time that you can enjoy the experience
- The overall value of the deal
- And that’s where someone else really gets their bearings from
We are at the point where everyone needs to stop pretending that everything that they see online is true. So, let’s look past the obvious ones. There are several ways that anyone should really focus on getting his or her own property.
Get more money
Anytime you move money into your savings account you are setting yourself up for financial success. You might not believe you have enough cash on hand to complete your real estate acquisition immediately. However, once you get that balance built up you only need to work on acquiring as much money as you can. If you don’t feel comfortable now, hopefully, you learn how to take less and save more.
Also, remember that you should never put money into a budget until after you start making money. After that, start putting more money into investments to earn even bigger rewards. Here, I am not talking about stocks or bonds. These are always risky strategies!
Most people think that getting a loan for real estate is the only way to truly invest and make money. Yet, there are countless instances of people who have done just the opposite and turned their $500k into over $2 million in less than 10 years. To many people, this may sound like a far-fetched claim. However, it’s not as unrealistic as you might think. In fact, with the right mindset, anyone can do it.
You really don’t need any documentation at all to qualify for a mortgage. Instead of spending thousands of dollars every month chasing down the “right lender” that can approve you for a loan, it makes sense to apply directly to lenders, bankers, or other reputable institutions for a loan. Even better, some banks may give you additional bonuses for lending money.
Getting loans may seem confusing but they are usually well-suited for those with assets that are not tangible. We know people that got loans without owning a house and paid interest, and you definitely won’t be the same afterward.
Do my homework
Doing your due diligence is one of the best parts when doing a contract. With a little extra time and effort, you can find out what the other side has done based on feedback from other potential buyers. Remember that this may or may not include personal conversations. Get the opportunity to talk about your vision and goals, ask about their plans, and learn as much as possible about them, so you can show them that you are interested in taking a chance.
Look at other deals
If you are lucky enough to get a great deal you probably aren’t too upset about losing some money on others. The key is being prepared ahead of time so that you have the most flexibility to do exactly what you want. Make sure you understand the situation and prepare yourself with as many guides as possible. Take advantage of the information in magazines and forums like Reddit and LinkedIn.
They are generally very informative and often contain valuable insights. You can also learn how to make better use of leverage. Leverage means having your cash flow increase through increased tax payments. Having good assets gives you the ability to use leverage on real estate without worrying about paying taxes. Keep track of these strategies through podcasts on YouTube or through websites like Smart Passive Income.
Every investment strategy comes with tradeoffs, but leveraging makes some trades for you. Your taxes might also depend on your finances at the beginning. Never forget that taxes are not taxable, but there may be changes that could impact your potential gains. To be safe, try to keep a log of all your tax filings.
Set a goal for future growth
We all hear the term “You’ve made it” and then get frustrated. Why would you ever leave your career or investments and go back to real estate? Well, we live in a world where you are surrounded by real estate pros who are continually pushing more and more people into it.
Unfortunately, this is just the case for many folks.
People who started off wanting nothing more than a home and maybe some fun times later want something more serious. Many people want and want high status today. If you already have the level of expertise that you want, set yourself and your investments up for more growth. That way you benefit from all of the perks of a successful business while providing excellent compensation for yourself!
Maybe working on building the next big thing can be part of your goals as well. Whatever goals you decide to follow for your retirement and children, you can guarantee that it is going to pay off. When you find the right fit for your life you will have accomplished something truly incredible.
When making investments in real estate it is wise to take advantage of real estate platforms that can help you get financed quickly while allowing you to grow both professionally and financially well. You can check these out in various types of online broker ships.
There are several pieces of advice that you should never give real estate investors. These tips will not only save you from embarrassment, but they’ll also help you avoid wasting your time and resources on properties that will never be profitable. Which piece of advice is the one that drove you crazy when someone gave it to you?