I have been an agent/broker, a rental property owner, and a house flipper for many years. I was an agent and house flipper for almost ten years before I bought my first rental property. When I started telling people that I wanted to invest in rental properties, I could not believe how many people told me not too. It was not just people who knew nothing about real estate telling me not to buy rentals, but agents and people in the industry!
I started to ask these people why they thought rentals were a bad investment. Some of them had bought rentals before, but many had not. For the people who bought rentals I noticed the same things. They bought properties at full retail value, with very little cash flow, and hoped they would go up in value. Basically they were investing like you would in the stock market. The more I talked to people, the more I realized I was on the right track.
I also talked to people who had never bought rentals, but still thought they were a horrible investment. I noticed the same trend. Everyone knew a cousins, uncles, brother, who bought a rental, and went bankrupt. They had no idea why they went bankrupt, what kind of property it was, or what actually happened. They just knew never to invest in real estate.
I realized more and more that most people have no idea what investing in real estate is really about. You don't make your money when prices go up, you make your money when you buy the property. When I finally bought my first rental property I confirmed what I thought; they are awesome!
##Why are rentals awesome?##
I have talked about rentals before, but I love them! Here are a few reasons:
You can buy them below market. That means I can buy a house worth $140,000 for $100,000. Is that easy? No! But it is possible.
You should be making money every month after all the expenses and mortgage.
You have amazing tax advantages. https://investfourmore.com/2014/06/06/tax-advantages-rental-properties/
Rents are a natural hedge against inflation.
Properties can go up in value over time.
Real estate is one of the easiest things to leverage. If you buy the right properties, loans can make your money go much farther.
I realized that the people talking trash about real estate, had no idea what they were talking about. They didn't know what to buy, they didn't know how to buy, and they had no idea what their goals were. Eventually. I found investors who thought similar to me and it was like we all shared this secret about how awesome real estate is. Of course, I am ruining that secret by telling everyone about it. haha
So, if you want to do something amazing with your life, do not listen to the haters. Listen to the people who have done what you want to do. Follow them, learn from them, and be encouraged by them. The haters are too scared to be successful.