Should I invest in real estate as a way to make money?
I keep hearing about people getting rich buying rental properties. The idea of having tenants pay my mortgage sounds great. But being a landlord seems like a lot of work and risk. Is real estate investing actually a good way to build wealth? How much money do I need to start? What are the hidden downsides?
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3 Answers
I made this exact mistake when I was younger and it cost me. Learn from others instead of learning the hard way. The personal finance section of any bookstore has dozens of books — they mostly say the same sensible things for a reason.
Don't make a big financial decision when you're stressed or excited. Sleep on it. The dealership, the realtor, the salesman all want you to decide RIGHT NOW because pressure works in their favor. Walking away is always an option.
The biggest financial mistake I see people make is not having an emergency fund. Before investing, before paying extra on debt, save 3-6 months of expenses in a savings account. This protects you from going into debt when unexpected things happen.
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