Investing in property can be very tough, especially when you are new to the game and are not sure what it entails. When it comes to investing in property, there are numerous misconceptions and myths that are often thrown around. Even after you do your in-depth research, it can be challenging to differentiate the facts from unreliable information that is found revolving around the internet.
Believing in such myths and misconceptions when making investment property decisions can enhance your exposure to risk and hence can ultimately have an impact on your capacity to construct a profitable and worthwhile property portfolio.
Therefore, if you wish to succeed within the property investment market, it is best to be aware of such myths. Here are five of the most common property investment myths from a reputable mortgage broker.
Myth 1: “I Don’t Have Enough Money”
It is often heard from individuals that they do not have enough money and capital to invest in property. This is regarded as one of the most misleading perceptions about property investment. Investors do not require a full 20% deposit to get started. Just because a property investor has lots of money now, it does not necessarily mean that they started out that way. You will begin to earn income from these investments, and in addition, your property will start to appreciate over the next few years. This transcribes to more equity which you can use to fund your next property purchase.
There are various options that mortgage brokers suggest for investors to utilise when taking their first steps into property. One may leverage their existing equity in their home, access their hard-earned savings, or even secure a property at today’s price and not settle till a future date. Mortgage brokers even suggest considering starting with smaller investments such as townhouses and apartments.
Myth 2: “Property Prices Will Always Go Up”
A common property investment myth stated by a mortgage broker Sydney is that the value of a property will continually rise. Within the Australian property market, this could not be any more inaccurate. In the imminent future, at least, properties are not unsusceptible to economic downturns. A number of factors need to be considered when investing in dictating if it will be profitable for you – costs of continuous maintenance such as management fees, routine maintenance and prospective upgrades.
When it comes to the long term, property investment is portrayed as a low-risk asset. The property market does, in fact, have the potential to expand over time despite any market corrections and sporadic drops in value. Sometimes, it may just take a little longer.
Myth 3: “It’s Too Risky”
As advised by a mortgage broker, a common myth of property investment is that investing is exceptionally risky. As a matter of fact, investors are recommended to invest in stocks over investing in real estate. Above all, it is hard to predict how successful your investment property will turn out to be.
Although it is crucial to understand the risk that comes along with property investment, there are numerous benefits that come with investing in real estate. A reputable mortgage broker Sydney recommends that rather than investing your money into shares where the market tends to go up and down, it is best to acquire extra income from rental properties. With rental properties, you are obtaining a consistent income from your rental property each month.
Myth 4: “Only Purchase In Areas You Are Comfortable With”
While it may seem like a very beneficial move to purchase a property in an area that you are most comfortable with, it can sometimes leave you in the dark. The value of a property may be different to one of a similar type directly across the street. For instance, just because Melbourne is named the ‘most liveable city in the world’, it does not necessarily mean it is a wise investment decision. Entering the Melbourne housing market at the wrong time may cause you to end up paying more for the property as the market may have changed.
Mortgage brokers suggest that it is best to select an investment property that will, in turn, produce the most profit for you rather than choosing one in an area that you are very familiar with.
Myth 5: “Renovations Can Enhance The Value Of Your Home”
It is widely believed that in order to make extra money on the property that you have just purchased is, to considerably renovate it. Although this is not always incorrect, it is not always true.
There is no guarantee that carrying out renovations worth $20,000 will increase your property’s value by $20,000. It is best to speak to a mortgage broker in order to figure out your finances to create a wise investment. It is important to surround yourself with knowledgeable individuals who can provide you with expert advice.
Get In Touch With A Mortgage Broker Sydney Today!
With the help of a mortgage broker Sydney, they can support you through your property investment journey and will be able to unveil any common myths when it comes to property investment. Be aware of such misconceptions to help you achieve your long-term property investing goals.