The property market often scares people despite its potential to turn them into millionaires.
Why? It may be because a lot of us choose to believe in weightless rumours instead of researching facts. “A little learning is a dangerous thing” is unbelievably true when it comes to information about property investment; knowing more always helps! This is why we’re about to bust seven common, yet dangerous myths that could stand in the way of you being an intelligent property investor.
Myth: You need to be loaded to invest in property.
If there’s any long-standing and ubiquitous myth that holds back potential property investors like no other, it’s this one.
Fact: Money does make money, but there’s also equity.
Even though you may not have that deposit sitting ready in the bank, you needn’t worry. Remember, there’s always the option of a smaller deposit if you pay mortgage insurance. Apart from this, there’s also the alternative of using the equity in your own home as your deposit!
Myth: You must do everything by yourself.
This is another giant lie; just as with so many other ventures, you don’t have to go it alone.
Fact: A team of experts will lessen the load and improve the decision.
Having an expert team to guide your investment choice will not only reduce the burden on you but also ensure you make a more efficient decision. To make the entire process even smoother, ensure your team includes a financial advisor and a property manager!
Myth: Saying yes to investing in property means saying yes to overnight riches.
The property market doesn’t work like an ATM. So, don’t believe this one unless you want to feel a nasty kick of disappointment.
Fact: A property investment can make you rich, but you have to be patient.
Even though there will be gains eventually, a belief that these will fall into your lap by tomorrow morning will only lead to disappointment when the reality of the slow pace of property gains hits you. Aspects like tenants not being available for lease at the right time could mean a rocky road in terms of financial benefits, but property investments still ensure fixed returns.
Myth: Don’t invest now! Wait for the right time.
Now is very often the right time to invest; you just may not know it. Delays, however, could mean properties getting more unaffordable.
Fact: The ‘where’ is as important as the ‘when’.
Instead of putting off an investment plan because you’re afraid it might not be the ‘right time’, invest in a property in a location that will benefit you. For instance, pick a spot where you know the rent you’ll earn will be high. Also, stay away from locations notorious for witnessing price drops or other wild fluctuations in pricing.
Myth: Property always appreciates.
Although the property market is more stable than a lot of other markets out there, appreciation isn’t guaranteed.
Fact: Like most markets, the property sector can also see dips.
While ups on the value front are very likely very often, they aren’t for certain. So, don’t go into an investment expecting guaranteed growth in value; you could set yourself up for a shock or two. There’s also the fact that properties don’t always grow in value at the same pace. You may see a 2% rise in December but a 1% rise in March. In the long-term, however, the dips tend to average out, giving you a healthy return on your initial investments.
Myth: You’re not going to profit much unless you diversify your investments.
This is not true and could lead to confusion and you might end up juggling too much all at once, for no reason at all.
Fact: Believe Warren Buffett: diversification is only required when there’s a lack of understanding.
Instead of poking your paws into too many investment pies of various kinds, if you want to take on more than one investment, do so in the property market itself. This could help you get better at the whole process too.
Myth: Investing in property will mean bankruptcy if you lose your job!
This one’s a reasonable fear that a lot of people have, but it’s not definite.
Fact: Bankruptcy is not certain, and don’t forget insurance.
Bankruptcy is the worst-case scenario, so don’t worry yourself sick thinking about its possibility. That being said, you need to ensure a financial safety net if you’re making a move to enter the world of property investment. But remember, properties often pay for themselves as time passes, and there are a number of insurance options that could help too.