Because honesty is always our best policy
As a company that guides real estate investors through the process, you can imagine how often we hear things about our industry that are not true. Every new investor, even those still in the consideration phase, has questions and concerns, so here are 5 of the most common things we hear about real estate investing that are simply not true.
You need oodles of cash to start investing in real estate
False. Many first-time investors borrow money to make their first investment. Some take out a loan on their primary residence to get the money together. Not many of the investors we work with have lots of cash lying around.
We pride ourselves on being honest with the investors we guide. We do not want you to go in on an investment property out of your budget or even one that will push other goals aside. We take each investor’s current situation into account when we make suggestions on real estate investing. If you are starting out and money is tight, there are ways to invest with others that are always a good opportunity to increase that original investment.
In other words, there are options for every budget.
Real estate investing means flipping homes
Real estate investing has become so much more than flipping houses. You can still buy fixer-uppers, put money into making them liveable, and sell for a profit, but this is a tough industry. Construction costs (especially now) are always higher than anticipated, the stress level on flips is also high, and they’re not that easy to come by! In an area like Ontario, finding a true fixer-upper in a good neighborhood is like finding a needle in a haystack.
Many of our clients are investing in properties that they will rent out while the market on real estate goes up and sell when the time is right. This could be months, but it’s much more likely to be years.
Other clients look to vacation homes which are then rented through Airbnb or VRBO. These were hot-ticket items during the height of COVID but continue to be a good option for investors.
And then there are those investors that buy properties to develop. These are not fixer-uppers, but maybe conversions or properties with room for an Accessory Dwelling Unit (ADU.) Again, the risk on these investments is higher, and the cash needed is usually more than the beginning investor is willing to part with.
Real estate investing is not a “young man’s game.”
AGH! No, no, and no again!
Many people think that investing is tied to age. We actually hear from some folks that real estate investing is for those people that are looking at retiring in the next ten years and have the cash put aside, and then we hear that the risk of real estate investing is only for young people, with time to recover from a bad decision. It can’t be both!
Real estate investing is not tied to age. Whether you are able to make a big risk, or if you’d rather play it safe, there are options for anyone. The only ageism we’d use is “get in as young as you can.” The younger you are when you start, the more wealth you will accrue.
Real estate investing is risky.
Hmmm, this one might be true, but it doesn’t have to be.
Any time you part with your hard-earned money, you are taking a risk. Even buying a new pair of shoes is a risk.
Real estate investing should be personalized. Every situation is different, and that’s how we, at Regalway, look at it. We work with every one of our investors to find the best option for them. As we already mentioned, we believe getting in young can help you reap the maximum rewards, and perhaps you have a high income with no family commitments at a young age. Maybe it’s an excellent time to take a risk! Or, if you are just starting a family, you are facing a lot of new expenses. Even a high income needs to be stretched in ways it wasn’t previously. This might be a better time for a lower-risk investment property; something that adds a steady income as a side hustle.
We can help assess the best option for you.
Real estate investing is not suitable for a married couple.
Our founders, Gabrielle and Kevin, have worked side-by-side at Regalway since the company’s inception. They have learned from the experience, growing a more robust business and a stronger marriage.
No matter who you decide to invest with, communication is key. Making sure your goals are aligned, laying out the roles within your team, and being sure you have a strong sign-off policy will keep you safe. Kevin and Gabrielle are experts at setting up first-time investors, and they can help you set it up, whether you are a married couple or in need of other partners to get kicked off.
Get in touch to learn what we’d advise for you: