Real Estate Investing: Smart Strategy or Financially Crazy?

by Zach Burnham

April 2025

In recent years, real estate investing has been promoted as the ultimate path to wealth. From TikToks promising passive income to YouTube channels showing million-dollar flips, it’s easy to think that owning or flipping property is a no-brainer. But is real estate investing smart or crazy?

As a local real estate professional, (and an investor myself) I work with investors at all stages—from curious first-timers to seasoned landlords and flippers. Let’s break down both sides of the coin so you can decide if real estate investing actually makes sense for you in today’s market.

 

Why Real Estate Investing Is Smart

 

1. Long-Term Wealth and Passive Income

• Real estate can generate steady cash flow through rental income, creating a consistent source of passive income.

• Property values historically appreciate over time, helping investors build long-term equity and wealth.

• Tax advantages like depreciation and mortgage interest deductions can increase returns.

2. Tangible Asset with Leverage Potential

• Unlike stocks or crypto, real estate is a physical asset you can see, improve, and control.

• You can use leverage (like a mortgage) to purchase a property with less capital upfront and still earn returns on the full property value.

• Property improvements and smart management can increase value and rentability, maximizing ROI.

Why Real Estate Investing is Crazy

 

1. Risk of Market Fluctuations

• Real estate markets are cyclical—values can drop due to economic downturns, local job loss, or overbuilding.

• A vacant property or bad tenant can quickly turn a “cash-flowing” investment into a money pit.

• Unexpected maintenance issues and rising property taxes can eat into profits.

2. Lack of Expertise Can Cost You

• New investors often underestimate renovation costs, overestimate rental income, or misjudge neighborhoods.

• Without market knowledge, it’s easy to overpay for a property or fail to spot red flags during inspections.

• Successful investing requires understanding zoning laws, property management, financing options, and more.

3. Emotions Can Cloud Judgment

• Many first-time investors let emotions guide their decisions—like falling in love with a property that doesn’t make financial sense.

• Panic selling during downturns or hanging on to a losing property too long can cause major losses.

• Good investing requires discipline, data-driven decisions, and often the guidance of a professional.

4. Real Estate Investing is NOT Passive Like People Think

• Searching for the right deal takes hours of research, property tours, and competitive offers.

• Renovations involve managing contractors, permits, and staying on schedule and on budget.

• Even with a property manager, you’re still responsible for taxes, repairs, legal compliance, insurance claims, and property performance.

• Turnovers, tenant disputes, emergency repairs—these are all time-consuming realities that investors must be prepared to handle.

Final Thoughts

Real Estate Investing: Smart or Crazy?

 

The truth is, real estate investing can be incredibly smart—if you’re educated, strategic, and realistic about what it takes.

It’s not a “get rich quick” scheme, and it’s far from passive. But for those with the discipline, work ethic and willingness to do their homework (or partner with the right professionals), it can be one of the most powerful wealth-building tools available.

Thinking About Real Estate Investing? Let’s Talk

 

Whether you’re a first-time buyer looking for a duplex or a seasoned investor expanding your portfolio, I can help you make smart, informed real estate decisions. I know the local market, I know what works—and I’ll always give you honest advice.

📞 Contact me today for a no-pressure consultation, and let’s talk about your real estate goals. No committing, just consulting.

Check out more of my #RealValueRealtor blog content HERE. 

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