Out of all the forms of investment that exist, real estate investing is often seen as the most accessible to the average person.
Thanks to shows such as the Property Brothers, real estate investing feels like something that your average Joe can do, which is why a lot of people venture into this form of investment. But is real estate investing hard?
Real estate investing is also often seen as “safer” and “easier” than some other forms of investing, but in reality this isn’t the case. In fact, real estate investing is hard (and that’s a good thing!).
In reality, the fact that real estate investing is hard is actually a good thing! If you don’t believe me, that’s okay, because I’ll be explaining the reasons why this is a good thing in this guide. So, if you want to find out more, keep on reading!
- What Is Real Estate Investment?
- Is Real Estate Investing Hard?
- Why Is Real Estate Investing Hard?
- Why Is This A Good Thing?
- Frequenty Asked Questions
What Is Real Estate Investment?
First things first, let’s take a look at what real estate investment is. Real estate investment is a form of investing that involves the purchase, management, sale and/or rental of a property for profit.
Real estate investment is a little bit of an umbrella term because there are lots of different real estate investment routes that you could go down.
Real estate investment is very popular because of these different routes that you can go down. You can choose an investment route that requires you to be active in the work or you can choose a passive investment if you would prefer.
If you want to be active in the investment route, then you could purchase homes to flip, or if you want a more passive income, you might choose to purchase a property and rent it out.
If you are looking for a way to make money through investment, while also having a tangible asset, then real estate investing could be the perfect investment route for you!
Is Real Estate Investing Hard?
As we have already established, yes, real estate investing is hard. There really aren’t any forms of investment that are “easy”, all will require knowledge, time and effort.
So you cannot expect to invest your money and easily get a good return on your investment. Knowledge is key when it comes to investing, and even when you go down a passive route, you will still require that knowledge to make money.
Real estate investing is a safer route of investment than some other popular forms of investment. This isn’t because it is easier, this is simply because the property market is more stable than things such as the stock market.
While the property market will have peaks and troughs, it is generally a lot safer than the stock market, and it is rare for your assets to lose value in real estate investment.
It is really easy to look at real estate investment from the outside and assume that it is an easy form of investment. As I said earlier, all it takes is one episode of the Property Brothers show to have you thinking that you can easily purchase a house and flip it in.
But in reality, it is never that easy. So, let’s take a look at what makes real estate investment hard.
Why Is Real Estate Investing Hard?
Like many different types of investment, real estate investment is a challenge. Investment should be a challenge because it makes the pay off that much better, and success that much sweeter.
There are lots of things that make real estate investing hard, so let’s take a look at what they are.
Finding The Right Property
Well the biggest challenge in real estate investing is finding the right properties. It is rare for the property market to become static. It is constantly moving, and new houses will constantly be entering the market.
However, as a real estate investor, the properties that you are looking for are very specific.
As you are seeking to make a profit on your investment, only certain properties will be suitable for your portfolio.
If you are flipping houses, then you will want to purchase houses that you can add both physical and financial value to as this is the only way to make profit.
This will often require you to purchase fixer uppers, and these do not come available as regularly as fully renovated homes.
Likewise, if you are looking to add a property to your rental portfolio, you will need to do your research on the area that you are buying in to ensure a suitable rental yield.
A lot of investors use the 1% rule to screen-out inappropriate properties (properties that would not be worth the investment), and this can remove a lot of potential properties, leaving you with much fewer options.
It Is Hard Work
Of course, finding the right property isn’t the only thing that makes real estate investment difficult. A lot of forms of real estate investment require hard work on your part, and this alone is what makes real estate investing hard.
TV shows, TikTok videos and content creators on Instagram make renovating properties look easy, but this is far from the truth. If you are looking to flip houses, then this will typically not only be time-consuming, but hard graft too.
Stripping a house back to its bare bricks is difficult, and even “easier” jobs such as laying carpet, ripping out existing flooring and fitting a new kitchen are not easy.
You can either get on with the hard work yourself to cut costs, or higher tradesmen to do all the work, but then this will eat into your profits. Nothing about real estate flipping is easy. It is hard work, but it is totally worth it!
Why Is This A Good Thing?
It can be really hard to understand that the difficulty associated with real estate investing is a good thing. We are programmed to think that hard work is a bad thing, but a lot of the time this isn’t the case.
No matter what form of investing you choose, it will be hard work. No type of investment is easy, investing is hard and it will require a lot of your time and effort if you want to make a profit.
If you have been involved in property before (even if it is only your home), and you enjoyed it, then real estate investing could be the right choice for you, simply because you will find it more fun.
The difficulty associated with real estate investing is a good thing because every single bit of hard work that you do is likely to increase your profits.
Cutting corners will damage your profits, so do every step safe in the knowledge that you are adding value to your home, and eventually it will pay off when you flip the home or start renting it out.
There is no denying that real estate investing is hard. There are very few forms of investing that are easy, they all take hard work, time and effort.
But the difficulty associated with real estate investing is definitely worth it because ultimately it will end in you making a profit.
Thanks for reading!
Frequenty Asked Questions
Is Property Investment Hard?
There is no denying that property investment really is hard work. If you are investing directly into property then there is a lot of work that comes with this, it isn’t just a case of buying a property and renting it out.
There will often be lots of physical labor that comes with property investment. So if you are thinking of purchasing a property, you need to be ready to get your hands dirty.
Can You Fail At Real Estate Investing?
Yes, you can fail at real estate investing. A lot of people fail at real estate investing, often because they make the same mistakes as their predecessors.
Many real estate investors fail because they do not take the job at hand seriously, and don’t treat their investment as a business. So as long as you keep an eye on the numbers, and remain professional at all times, you should succeed.
Is Property the Best Way to Invest Money?
It is difficult to decide which type of investment is the best way to invest money, primarily because it depends on your own personal circumstances.
While real estate investment might be the best way to invest money for one person, this isn’t necessarily the case for somebody else. However, there’s no denying that this is a great type of investment.
Paul Martinez is the founder of BendingDestiny.com. He is an expert in the areas of finance, real estate, and eCommerce.
Join him on BendingDestiny.com to learn how to improve your financial life and excel in these areas. Before starting this blog, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.