There are lots of theories, standpoints, and ideas about property investment, but not all of them are true. And if you are wanting to make money from property investment, it’s important that you don’t fall for any of the common myths that seem to pervade the subject. With all this in mind, let’s take a look at these common property investment myths – and put them to bed once and for all.
It’s only for the wealthy
Property investment is often thought of as an activity that can only be enjoyed by the rich and well off. But that’s not strictly true. If you are a homeowner, for example, you will find it a lot easier to invest in something like a buy-to-let property – or perhaps even a holiday home. Because you have capital behind you in the form of your house, it makes you less of a risk where the banks are concerned. And they may be prepared to give you a shot at buying another property if you have a full costed and sensible business plan to present to them. Yes, you may have to stump up some cash to lay down as a deposit, but the numbers we are talking don’t have to be huge and should be achievable for most households who operate sound household budgets.
You have to buy in a popular location
There are expensive areas of the country where everyone would love to live. And if you are looking to invest in a rentable property, it might seem like good sense to focus your attention on investment properties in these locations. But the reality is somewhat different. First of all, prices will be huge – and you will need to cover those high mortgage payments with high rental charges. And actually, the chances of the property price rising significantly in the short-to-mid term are relatively slim. Your best bet is to focus on uncovering properties in up-and-coming areas. Going down this route will enable to you buy cheaper, raise rents over time, and at a much higher return in the short, mid, and long–term when the time comes to sell.
You should buy a property based on personal preference
Never purchase a property that you fall in love with if you don’t intend to live in it. Your preference has to be for a property that is based on the needs of the market – not your personal choice. In fact, keep emotion out of the scene as much as possible. Ultimately, when you are emotionally invested in a property for sale that you love, the end result will often be that you end up paying over the odds. And that can have a huge impact on your profits in the long-term – and it could even result in you suffering from severe financial problems.
You need to attend property investment conferences
You’ve probably seen many property investment conferences advertised up and down the country. These events are typically run by people who have made vast swathes of money from their investments and claim to have tremendous experience that they can impart to you. But be careful. Some of these events are just marketing projects that encourage you to part with your cash to invest in future projects – and there is obviously huge risks involved. Also, the money you pay to attend these conferences can be extortionate. You are far better off finding an independent, reputable investor in your local community and getting to know them. These guys will be able to give you sound advice – often for free – and may even help you get started with your property investment with a few useful tips from their knowledge of the local community.
It’s a win-win
A couple of decades ago, buying a property anywhere would almost be a guarantee that you could make a significant profit. But don’t forget that if you are investing in buy-to-lets or holiday homes, there is a lot of work and extra expenses to consider. Maintenance, repairs, advertising, finding new tenants – it all costs time and money. Plus, of course, we can never be sure that the next property market crash will push your once-profitable house into negative equity.
OK, so there you have it – some important myths to consider before getting involved in property investment. It’s vital that you understand what you are getting into before taking the plunge, as it is possible your investment could lead to disaster. Ultimately, a sensible plan and finding help from experienced investors can help you ensure your enterprise ends with a nice return and a huge success.