“A majority of Americans (two-thirds) believe investing in real estate, whether for a flip or a renovation, is just too hard, too costly and too far out of their expertise — especially compared with other types of investing,” according to a 2017 RealtyShares study.
Compare this with the same report that says, 77 percent of respondents aged 35-44 believe that house flipping is a good way to make money, followed closely by millennials (18-34) at 72 percent.
The takeaway: People are willing to give up on a dream if it seems out of reach.
Problem and Solution
It stands to reason that less barriers = more investors. So how can these obstacles be addressed?
Problem: Too hard
Difficulty is often associated with process. How do I move from non-investor to investor? In other areas moving from non-investor to investor is easy - decide how much to contribute in your 401k and the risk category you are comfortable with. You don’t have to think about it until you retire. Real estate seems to require much more active participation.
Solution: A guided path to start, build confidence and grow at your pace
This is why the RealtyShares study says, "a majority of Americans aged 18-44 claimed they would be more likely to invest in real estate if there were technology available to make the process easier.”
Why? Because the right technology, like TribeVest, guides you through the steps in a way that educates and builds confidence as you get closer to making an investment.
Even better, is the fact that with TribeVest the technology brings together others going through the same process at the same time. Not just others, but others you know and trust. This means there is familiarity and a shared experience.
And… the process becomes easier.
Problem: Too costly
There is a terrible rumor that only the wealthy can invest in real estate. This creates the fear that you don’t have enough to get started. The truth is that the wealthy invest in real estate not because they have the means, but because it has the best returns - an average of just over 10% return on residential properties according to Mashvisor. But, investing in real estate does require capital.
Solution: Save and fund your investment together
If the barrier is cost, the solution is clearly money. Splitting the cost amongst others means that the money that you as an individual need is less. One example of this is crowdfunding. While this lessens the financial commitment, it also lessens the ownership and return possibilities. Instead, by pooling manageable contributions, you can reach a tipping point to start an investment earlier. Again, the technology guidance and management of this savings, in a tool like TribeVest, makes the process easier.
Problem: Too far out of the area of expertise
When it comes to real estate there are a lot of how’s, what-if’s, and should I’s that come up through the process. This is overwhelming and scares many would-be investors away even if they follow the right process and have the capital.
Solution: Lean on the experts
You are not the first person to do this. Connect with a network of legal, financial, real estate, property management and other professionals that show up at work everyday to help people just like you. As a TribeVest member, your tribe will have access to partners aligned to the services you need when you need them so you can get answers and make decisions when you need to.
Back to the big question
Is investing in real estate too hard? We think the answer is no. Investing in real estate without the the guidance, support and network does not position you to be successful. However, to put your dream within reach you will have to overcome the challenges; we just don’t think that you have to do this work alone.