If you have some extra money, you must buy the property. Investing in real estate is the best and safest option. No matter what happens, you can still make a profit as the price goes up, people don’t talk about real estate that way.
Unfortunately, this is not entirely true and if you ask someone who invests in real estate they will tell you to think twice before investing your money. This doesn’t mean that you can never make money by investing in real estate, but rather that there are so many hidden rocks that most people don’t know can cost you.
Does house price always increase? Not really, let’s take a look at some numbers. According to the NAR, during the three-year period from 1986 to 2004, house prices rose by an average of 4.4 percent, which is good, at least much higher than the inflation rate. Unfortunately, this was the last year of healthy growth.
The market sank and the following year, the growth was only 1 percent which is not great and we all know what happened then, the market crashed in 2008, house prices are falling year after year. In fact, they have dropped by more than 30 percent. It took some time for the market to recover, but that healthy growth never came back. If you look at inflation since 2010, house prices haven’t really risen.
But some people still say that even if the prices don’t go up too much, raise money by renting every month. And in 20 or 30 years, the rent will pay off your investment and end up with the property you can still rent. What a brilliant strategy.
Unfortunately, this is not as great as it sounds. First, you will not rent it directly for 25 years, because tenants come and go and of course there will come a time when your flat will be empty but it will take money from you, it will be like a hole in your wallet. Second, real estate is not the type of investment where you just forget to buy it, it needs maintenance, it needs renovation. And in my experience people don’t think about any rental property like them.
So if you get there, you should fix it more often. In other words, your real estate investment never sells unless you sell it. Even if the price of the house goes up, you are only getting richer on paper. You need to sell that property before the price goes down again. Even after these 2 arguments some people still say it doesn’t matter, it’s mine, I’ll just go there and be with myself and I’ll rent it when I’m not around. In my experience this is a terrible strategy.
Because when you buy that house, you buy it based on your own needs which usually do not match the market demand. So what’s going to happen is you bought it for yourself and it’s hard to rent now because it just stays there as a liability. Owning a property where you don’t live and you can’t rent it hurts the donkey.
This is because a lot of people can lose money when investing in real estate, they are not investing, they bought this property thinking that this property is real estate before investing. And last but not least, real estate is one of the oldest competitive industries out there, as it is one of the oldest industries in history. So in order to find a good investment, you need to not only know and understand the market in depth, you should also look at hundreds of options before throwing your own money.
If you are not in the real estate business, you have no idea how much time and effort it takes to find a good opportunity. So if you think that no matter what property you buy, you will be able to rent it, after all, its value will definitely increase, you are doing it wrong, my dear friend. And for God’s sake, please don’t mistake me and don’t bombard me with comments.
You don’t understand anything about investing, you just lost money and now you’re just preventing someone else from making money. Yes, I have AC I made a lot more money than I did when I started and the main point of the video is to clear up some common misconceptions. So if you decide to enter this industry, you know what you are doing.
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