RCN Capital Blog

6 Common Real Estate Investing Misconceptions

Written by RCN Capital | Jul 20, 2022 4:00:00 AM

When you think of investing in real estate, you might think you need large amounts of startup capital and the right connections to purchase a property. Although it can be an advantage to have capital and the right people on your team, you can invest in real estate without either of these luxuries. Here’s 6 common real estate investing misconceptions that you might have heard floating around the real estate market.

6 Common Real Estate Investing Misconceptions

You Need to Be Wealthy to Invest

Investing in real estate doesn’t require you to be wealthy. There are options for investors that don’t have much startup capital to help get their foot in the door. Although many people assume you need to have a cushion of cash to get started investing, a hard cash lender can help you secure the funding you need to complete your real estate project. If you plan on borrowing money to help fund your real estate investment, be sure to pay back your loan on time to avoid any consequences or extra fees.

You Need to Have Connections

In real estate, it’s an advantage to have connections, but it’s not necessary to start your investing journey. If you choose to work with a hard cash lender, you’ll be exposed to a multitude of connections that you can utilize throughout your investing career. If you need help developing connections, leverage your network that you already have such as your close friends and family, or a local hard money lender. Your hard money lender can give you experienced leads and connect you with high quality contractors.

You Need to Be Lucky to Make Big Profits

As with most types of investing, real estate investing takes skill and strategy to make profits. It’s rare for someone to generate profits strictly from luck in the real estate market. However with the right strategy, anything is possible. Developing a well-thought-out strategy can help you guarantee a better long-term return. The first step in generating profits in your real estate investment is to acquire your property at a fair price; you should avoid relying on luck to bring you profits.

Investing in Real Estate is Extremely Risky

There’s risk associated with every financial action you take; with some opportunities holding more risk than others. Investing in real estate may seem like a risky option to some, but it’s not as risky as you may think. Depending on the property you choose, your risk may vary. A long-term investment has less risk than a short-term investment, such as a fix and flip. Taking the time to do the proper research and developing a plan with multiple exit strategies can lessen the risk in your investment.

Timing is Everything

You might have heard that timing is everything with an investment, but this is not particularly true when it comes to real estate. If you are in it for the long-term, timing is not going to be an issue with your investment. Like any market, the real estate market will go through cycles. If you do your research and buy a property at a reasonable price, your investment should pay off over time. Depending on your property’s location, your value will fluctuate according to the local market.

You Have to Be a Homeowner First

Although it’s nice to already have experience in the real estate market, it’s not necessary to start investing in it. There are many investors who aren’t homeowners yet who decide to invest in the real estate market. Just because you don’t already own a house doesn’t mean you can’t put your money to work for you in real estate. The earlier you get started with your investment, the more time it will have to bring you profits. Don’t hold off on investing in real estate because you’re not a homeowner; leverage your money to earn profits that will help you become a homeowner.

RCN Capital

RCN Capital offers short-term and long-term financing options for real estate investors. Whether you are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that are suited to your needs.Connect with us todayto discuss your next real estate investment.