Real estate investing for many is a great way to make a lot of money. However, you do your research well. Above all, you need to spend enough time to understand the basics of this investment. It is important to realize that real estate is one of the most overvalued investments in India. If you are planning to put in; you need to understand the facet of real estate investing.
Want to stay away from getting knotted in the emotional aspects of real estate investing? Looking to make a financially sound decision? It is exceedingly essential that the real estate myths be identified and sent away. Let’s reveal the myths behind real estate.
Real Estate Investing Money Myths
1. Rich Enough to Invest in Real Estate
Many consider that investing in real estate is a good decision only if you are economically rich and stable. However, the truth is far away from this belief. You may easily avail home loans from banks or other financial institutes. Most of the lenders finance around 80 percent of the total property value. Hence, you need to pay only 20 percent of the value of a property as down payment.
2. Land is Scarce
The most familiar myth spread by real estate agents is that land is inadequate. Moreover, the proponents of real estate investing keep saying that there is a limited amount of land in the world. Besides, they mention that with the increasing population of the world every day the land prices of the world will keep on rising. Consequently, there will always be a shortage of land. “Land is scarce and therefore precious” there is no logic in. It is rather the propagation of a falsehood!
3. Real Estate is a Great Investment
There is no denying the fact that we witnessed an extraordinary boom in the real estate sector in the past decade or so. For many buying a property is an excellent investment. In fact, many believe that property is going to worth way more in the future than what they invest at present.
4. Past Performance Predicts Future Performance
There is a common inclination amongst optimistic real estate investors to consider a past property market incident to craft an extremely bullish future situation. However, you need to realise that there can be a change in the situation at any moment. In case, there is an unexpected economic revolution everything can just change.
5. Real Estate Investments Can Be Flipped Easily
Well, this is not a very popular fairy tale. Here, the investor plans to purchase a property not to use, but with the purpose to sell it for a return. To put in simple words, they want to buy low and sell high. Here people buy a property, remodel it and sell it at a higher price. Not to mention, the strategy gives investors the chance to build up wealth over time. The reservations involved in the process may lead to potential financial loss.
6. Buying is Better Than Renting
People have an emotional connection with their property. Buying a property for many is like a dream come true. A property makes one economically more secured. Furthermore, many people think that instead of paying monthly rent it is better to invest and buy. Buying is however, a long-term investment. The point often overlooked is, if you avail a Home loan to purchase you actually need to shell out more than your rent as EMI. To begin with, analyse the true cost involved.
For rent vs. buy; which is better; click Buying vs. Renting – Which is More Profitable?
7. All Real Estate Agents are the Same
This is the most popular myths in the real estate industry. Many people believe all real estate agents are the same. Subsequently, they make mistakes while choosing the real estate agent. A dependable and reputed real estate agent with proper experience plays an imperative role. A real estate agent is not a waste of money. They can actually guide you and help in making the process hassle-free.
To Sum up
As mentioned above, there are a number of misconceptions and myths about investing in real estate. The market will always go up is the biggest one. See-through the myths about the real estate market mentioned above. I hope you would be able to make investments profitable.
This blog intends to list down some of the leading real estate investing myths and try to set straight them.
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