If you’re new to property investment and the real estate market, you’ve probably come across a large quantity of useful and not-so-useful advice online. To make the task of investment more difficult, there are quite a few myths circulating about the property market that could end up costing you money. To ensure that you are not led astray by unhelpful misconceptions, we’ve busted some of the most common myths below.
1. You need to invest in premium properties
Many investors are told they need to target premium properties that are affordable only to very wealthy individuals in order to make a decent profit. This is simply not true. Expensive properties are subject to less demand as fewer people can afford them, whilst affordable houses in relatively cheap areas can attract a significant amount of interest. What’s more, as the demand for certain affordable areas grows, prices in these places are driven higher, improving your chances of making a profit.
2. You must be wealthy in order to invest
This is an enduring myth that prevents many people from getting into the property investment business. However, it should be noted that most investors own a modest number of properties (usually two or three) and earn wages that sit around the Australian national average. Instead of building careers on already-existing wealth, many investors use the equity associated with their homes to purchase their first investment property.
3. Investment involves sacrificing life’s small pleasures
Many people mistakenly believe that they have to sacrifice their current lifestyle in order to enjoy financial security whilst investing. If you invest strategically in up-and-coming areas, this should be easy to avoid. As your property grows in value, you will quickly start to make back the money you have invested.
4. You must follow market trends
When property booms occur, many investors fail to take advantage of promising markets until it is too late. They end up buying properties just before a certain market spikes, only to see the prices of these properties start to fall over the next few months and years. A good rule of thumb when analyzing the market is to avoid following the crowd. Successful investors are usually very adept at finding locations where prices are only just beginning to strengthen, pinpointing growth areas before their competitors. Try not to worry about how a particular market is performing in the present moment, focusing instead on its potential long-term performance.
Get in touch with Living Property today
If you’re ready to make your investment dreams a reality, do not hesitate to get in touch with Living Property today.