It is not uncommon to hear misconceptions about the real estate industry. Some people believe that you need to be rich to become a successful real estate agent, while others think that an agent can’t make any money.
Many people don’t understand the real estate industry, so they’re scared to invest in it. For example, many people believe that investing in real estate is risky because of all the horror stories about scams and foreclosures. The truth is that there are plenty of ways to avoid these risks if you educate yourself about them upfront.
Read on to learn more about the myths surrounding the real estate industry and the truths that aim to debunk these myths to help people alter their perceptions of this industry.
Myths versus Reality
The real estate industry is growing at an alarming rate, but debunking myths about the industry can help people learn more about it. It’s a common misconception that only rich investors should consider investing in real estate because there is so much risk associated with real estate investments. The truth is that even if you have little or no money to invest, there are still ways to invest in the industry.
For example, buying property for sale is a good way to invest. You don’t need to have a lot of money saved up for this, and you can make the payments with your monthly income instead of going into debt. Let us take a look at the most common myths surrounding the real estate industry:
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Real estate agents are all alike
There are different types of real estate agents out there, so it would be difficult to say that all of them are alike. Some specialize in specific areas, while others offer a full range of services. You need to find the agent who is best suited for your needs because they will be working closely with you and will have access to a lot of your information.
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Real estate agents earn a lot of money
Yes, real estate agents make a good amount of money. However, the majority earn about $45k yearly on average, which really isn’t that much considering how much time they’re putting into their jobs and how many hours per day they work.
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I need to have my credit score high for getting approved as a homeowner
Many people think that they need to have a good credit score to get approved for a home. This isn’t true since people with lower scores can also be homeowners as long as they can provide other forms of income and/or collateral.
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I should buy the house because it’s cheap
Buying something just because it’s cheap will oftentimes lead to buyers finding out that they’re making a mistake. This is because the cost of repairs can often be higher than what was saved from buying an inexpensive home.
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You need to make big down payments
A good rule of thumb when it comes to real estate is that you want at least a 20% deposit before the bank gives you a loan–but this isn’t set in stone, and some people can get away with lower deposits or no money on hand, depending on their credit. Therefore, do not lose hope even if you’re not able to put down a large sum of money.
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You need tons of cash
Unless you plan on building your own house from the ground up, you’ll have to purchase an existing home and then make renovations or alterations to it before living in it. This means that you don’t have to pay for everything all upfront. You can buy a home and then pay for renovations later on.
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You’re not allowed to use the equity in your home
Technically, this is true; but if you want to borrow money from a bank or other lending institution for any purpose — including investments and retirement savings — you’ll have to be able to show that there’s enough equity in your home so it can cover the loan amount that you will be borrowing.
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It’s illegal to rent your home out
This is true only if you are not on the deed of the property. If you’re a co-owner, then it should be legal for you to lease or sublease your property as long as there is an agreement between all parties in place and everyone understands their obligations when leasing a property. Therefore, you can be the landlord and rent out your property.
Dealing with Real Estate Myths
Educating yourself about the real estate world can be a daunting task. The Internet and social media have been flooded with content, which created myths that people now believe to be truths about the industry. By learning more about the real estate industry, debunking myths, and realizing the truths behind real estate, you can make more educated decisions about your property.
