You’d be surprised how many ‘words of advice’ are floating around on the internet (and even in property literature) that are simply not true! Circulating false information is not only making the decision for investors harder, but it’s also dangerous to any first time investors who may not have done thorough enough research and believe what is being said.
To make sure you don’t fall victim to any silly myths, I’m going to talk to you about a number of common misconceptions and why they’re simply not true!
1. Buying Cheap is Best to Get Started
While in theory this advice might seem accurate, in reality, focusing only on cheap properties can lead many first-time investors to make impulsive (and bad) property decisions. As they are so excited and focused on rushing into buying the first property they can find, many often forgot to do their due diligence.
Remember – a property is always priced based on its circumstances. There’s a reason that it’s cheap! Factors such as location, rental demand, rental return and potential for capital growth are all factors you need to think about. And if all of those are positive, you have to ask yourself, why is this property so cheap?
There must be something else – is it because it needs extensive renovation? Is there structural damage or land subsidence? Are the owners trying to sell quickly due to an unwanted development close by? Is it affected by traffic noise or a new proposed highway?
Before you set out in search of a property, you should know what criteria you want your investment to meet. Successful investors both know their budget AND focus on finding a property that ticks all their boxes. Remember, it’s not just about PRICE!
Although this is an important factor, in most cases you are so much better saving a little longer for a property that meets all your requirements, as the future returns will end up much more beneficial to you!
2. Buying Local Is Best
You would be surprised to learn how many people honestly believe that the best investment opportunities are those located in the area that they live. This is mainly due to them feeling as though they ‘know that area’ well and feel comfortable there – which I totally get!
In some cases, you might actually be lucky and find the perfect investment in your area at the right time, but realistically, investing is really about the numbers and the TIMING of the market.
You should never discount properties in other states or areas, as they may often be a smarter investment choice!
3. Buying New Properties Is Too Expensive
This huge misconception is centred on the belief that established properties on the market seem like an easier and smarter investment. After all, they are tangible and you can see what you are getting, right?
While this might be true in some cases, many people underestimate how much they can actually save by investing in new properties. If you’re buying early into an off the plan development, you can often negotiate a lower entry price. You can also save on stamp duty if you build a new investment property on land!
Lastly, you can also receive an uplift in value from the time you purchase until the time the property is completed. Of course, there are risks, but if you ensure you do your due diligence, you can easily minimise these to ensure a successful investment.
4. Buying Online Is Easy
When you think about it, finding a property online should be a piece of cake. All you have to do is enter in your price range, location and, all your viable options are presented and you’re ready to go shopping… right?!
Trust me, if it really was that easy, EVERYONE would be doing it!
What’s shown online isn’t always 100% accurate to reality. Remember – the job of these sites is to show the property in the best possible light. I go to so many inspections where the living room is about ½ the size of what the photos portray online – and that’s just the tip of the iceberg!
So if it seems too good to be true, it probably is! To ensure that you are making the right choice, you should always personally inspect the property, as well as have professional inspections carried out by suitably qualified building consultants.
The main thing you should remember when it comes to investing is that asking the right questions is crucial. When you find a property, ask yourself “Why should I buy this one?” Make sure it meets your criteria and you aren’t sacrificing any of your non-negotiables (within reason).
And don’t forget – DUE DILIGENCE! Always, always, ALWAYS, do your research.
So there you have it! 4 common myths about property investing busted! Remember, the key to success is knowledge. Always make sure you look into things yourself and don’t just blindly trust the opinion of someone else simply because they are an expert!
Have your own property myth you’d like busted? Feel free to leave a comment below for me!
Until next time,