Whether you’re a new property investor or an experienced one, your internet searches have likely led you to discover a number of online forums devoted to real estate investing. On any given site, you’ll find a multitude of real estate professionals from all over, weighing in with their opinions on everything from being a landlord to fix and flips to real estate investment trusts (REITs). It can be motivating to find other people devoted to something you’re passionate about, but should you let their opinions and experiences sway the decision-making for your own portfolio?
The internet: A wealth of information and misinformation
There’s a lot of good advice out there on the internet. And there’s also a lot of really bad advice. Suffice it to say, you need to figure out what’s what whenever you venture out onto an internet forum of any kind — but especially one that concerns your bottom line as an investor.
First and foremost, understand that statements made on any type of online forum do not equal advice from a legal or financial professional. If a topic comes up on a forum that you want to bring to the attention of your own attorney or CPA, that’s fine. But to make any rash decisions based on the experience of an unknown internet user is just plain irresponsible.
The advantages of forums
There’s clearly a desire for discussion amongst investors, given the number of forums and their members. Some of the more popular real estate investing forums are REIClub, Property Forum, and Connected Investors. There are some very good reasons for connecting with other investors via these forums and others on the internet, including the following.
If your close circle of family and friends is tired of hearing you ramble about REITs, an online forum is going to be your place to chat with other like-minded people. It’s also a place to commiserate or celebrate. Whether your latest fix and flip was a success or a flop, a forum is full of people who’ve been there, done that many times before.
Looking to diversify your property portfolio? Search the threads to see who’s done it already to get some insight. Especially if you’re a solo investor, you’ll want to find people familiar with your type of investments and can provide some feedback on an opportunity you’re considering. Again, don’t make any hasty decisions without consulting an attorney or your CPA.
The internet has been the initial source of many partnerships, ranging from friendship to marriage to business. It’s possible to forge connections with other investors as time and discussion threads go on. If you’re looking to pursue investing in other real estate sectors or regions, you might find the right people to partner with on a forum.
The drawbacks of forums
Like anything else related to social media and the internet, people tend to exaggerate. A lot. And exaggerations tend to run rampant on web forums.
When people are sharing success stories, understand there will be some degree of filtering out the bad stuff. If you are a newer investor, you need to hear the whole story so you know what you’re up against when it comes to your own investments. And on an internet forum, you’re not likely to get the whole story.
Making forums work for you
If you’ve found advice on a forum you want to apply to your own investing, remember the following factors.
Are you a small-town investor comparing your rental portfolio to that of a big-city investor? Do you live in Kentucky but found yourself on a discussion thread about new landlord laws in California? You can connect with a diverse group of investors, of course, but understand that the information you get might not always apply to your situation.
The experience level
Newer investors can certainly get inspired by the success of seasoned investors, but they shouldn’t base their own success at this stage of the game on those returns.
The risk tolerance
An experienced investor with a full portfolio can take a hit on a property and still keep going. Granted, investing at any level in real estate has its share of risk, but as a newer investor, don’t base your own risk threshold on that of someone with a six-figure monthly cash flow.
How to be a responsible forum participant
Now that we’ve discussed how to avoid the pitfalls of using a forum, here’s how you can help make them valuable and informative for yourself and your fellow investors.
Stick to the topic
People search out real estate investing forums because they want to know how to grow their wealth through real estate. When the conversation starts to wander to other topics, feathers can get ruffled. The best thing to do is read up on the forum’s guidelines to see what the best practices are for good participant behavior.
Share information responsibly
It’s OK if you don’t want to share the cringeworthy details of your own investment gone wrong. But if you’re giving advice to someone in a similar investment situation, don’t mislead them into making the same mistakes.
Keep it civil
Forums are notorious for heated discussion that can get downright ugly. Shout or shake an angry fist at your computer screen if you must, but keep the online discourse polite.
The bottom line
Online forums can be both a boon and a bust when it comes to gathering information and new ideas pertinent to real estate investing. As long as you can tell the difference between good information and misinformation — and do your part to avoid contributing to the latter — tapping into a large community of investors could benefit your own bottom line.
Unfair Advantages: How Real Estate Became a Billionaire Factory
You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data itâ€™s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, itâ€™s no surprise why.
But in 2020 the barriers have come crashing down – and now itâ€™s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.
To get started, weâ€™ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate – and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.
The Motley Fool has a disclosure policy. Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from Millionacres is separate from The Motley Fool editorial content and is created by a different analyst team.