Myths About Real Estate

Myths often form the basis for fear and holds people back from taking on new opportunities. The same rings true when it comes to investing in real estate.

Here are some of the myths:

MYTH: You have to have a lot of money to invest

A falsehood that has been propagated about the real estate sector is that it requires a lot of money to invest in. This may be true for large-scale projects but there are projects which one can undertake that are not as capital intensive, albeit you’ll have to get creative to invest in the sector.

Factors such as location and the size of the property will determine how much land you buy. If you can’t afford a one-acre piece of land, you can go for a 50*100 depending on what you want the land for.

MYTH: Value of property will double in a short period

This misconception tends to cause a rush for property buying. Land will appreciate in value but it will not happen overnight. There are certain factors that make the land appreciate.

Improvement of infrastructure is one of them and planned development in a certain area which may take five to ten years to gain value.

MYTH: Past performance predicts future performance

There is a common tendency amongst hopeful real estate investors to extrapolate the trends that were present in the property market in the past and create an extremely bullish future scenario.

However, one needs to understand that the world has undergone a fundamental shift in the last decade or so. Business arrangements like outsourcing, free trade and cross border investments by multinationals had created an unprecedented boom in the emerging economies.

MYTH: Quick cheap property deals are a must-have

The excitement of purchasing property at a cheap price may make one forgo all the checks and give the cash with the expectation of being handed the land in the fastest time possible.

Contrary to what many people may want, quick cheap deals aren’t the best especially if they are mired by a lot of factors that aren’t adding up. For starters, the person selling may not even own the property in the first place and could be trying to pull a fast one on an ignorant buyer.

If you are planning to get into real estate, don’t let the myths discourage you. They can be debunked with proper explanation and extensive research.