The real estate industry is one that has always held a high barrier of entry. In order to even break into these kinds of investments, you’ll need to have enough money to at least partially purchase a house. Unfortunately, this isn’t something that everyone can do on a whim.
We’ve all heard the idiom that it “takes money to make money” and the real estate industry certainly is one that showcases this very clearly. After all, if you can buy a house and sell it for even 5% more the following week, that’s some serious profit you’re making. But with advanced technology and undiscovered investment strategies, is it still the case? Is success as a real estate investor all about how much capital you start with?
The answer is complicated.
Money certainly makes it easier
We won’t lie to you; it’s certainly easier to make a profit if you have more starting capital as a real estate investor. Even if it’s not real estate, the idea that having more money means you can make more money still holds true. If you want to sell big and luxurious homes, then working with project managers like Costas Constructions is essential, and hiring them can be fairly expensive if you’re not accustomed to real estate development. At the end of the day, there are a lot of people to pay and there is a lot of money at stake.
But take note; we didn’t say that capital is a prerequisite for being successful.
What does success mean to you?
When it comes to defining real estate success, money isn’t the only metric that you should consider. Many people find that success can mean whatever they want it to mean. Some people believe that success is about obtaining financial freedom, and others feel that success means whatever they want it to mean. Others believe that success is just a term used to describe that you’ve reached a goal. Once they’ve accomplished something, they consider themselves successful and will move on to the next goal.
In other words, success isn’t defined by how much money you make unless you choose that to be the only metric worth thinking of.
Being successful with less capital
Having more capital doesn’t necessarily mean that an investor is smart. Someone could invest $500,000 into a property and see $600,000 back, essentially making it a 20% gain in profit. However, if you were to invest in something worth just $15,000 but could make $30,000 back, that’s a huge 100% profit that you’ve made. This means that you’re a lot more efficient with your investment and you made a much larger profit.
This is certainly possible with larger sums of money too. For example, buying run-down properties and renovating them could help you almost double your profits if you’re smart about it. Investing in lesser-known areas with a long-term property strategy can also be just as profitable, often resulting in massive gains if you’ve done your research. With so many ideas that have yet to be explored, it’s important not to feel intimidated by real estate investments just because you have less capital to start with.
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