Agreed that an investment in real estate comes from a backing of unconditional hard work and years of saving unless of course you are fortunate enough to be born with a silver spoon! Therefore, for a risk-proof reward, it is advisable to keep away from common fallacies that float around real estate investment. Here are ten common misconceptions that the Wave Group shares to make you wear your life jacket before you shed your hard earned assets:
1. Real Estate Makes you Rich Overnight
No investment in real estate can make you rich overnight. Those who make good money with their properties do so only after studying the market analytically and waiting for a period. In short, knowledge and patience pays in real estate market!
2. It is best to go for Seller Financing
There is no such rule. The present market is flooded with an array of financial lenders each having its own pros and cons. A careful comparison leads to the selection of the best.
3. Location is all that matters for property valuation
No doubt that a good location is ideal; however, less desirable locations also end up yielding more profit. The size along with the amenities associated with the property goes a long way in determining its value.
4. Independent builder floors reap same profits as luxury apartments
Independent builder floors come at low costs. However, the advantages associated with reputed ultra luxury apartments that come with world class amenities like 3 tier security, recreational centers and clubhouse facilities have much higher valuation.
5. You need to be exceptionally rich
It is not always mandatory to be extra ordinarily wealthy to invest in a luxury home. With a saving that allows you to pay the initial down payment, you can always proceed with the booking provided you have a good loan repayment record as per the bankers.
6. Never go for a property that has a foundation issue
Two things to focus in such a case are the net discount and the cost to repair. If the former exceeds the latter significantly, go for it. After all, evaluation and making the most of opportunities is the law of business in real estate too.
7. Real estate no longer holds growth prospect due to the 2008 financial breakdown
The real estate market does undergo various ups and downs and is affected by incidences like inflation, political issues and natural calamities. Every business passes through different cycles. However, factors like thorough homework, acquirement of good property at justified price and proper maintenance over time, contribute in yielding solid ROI.
8. Agents acquire the cream of the properties
This is a completely wrong conception. Majority of the real estate agents are neither that rich nor so smart to invest in multiple properties that too all at a time!
9. Tenant’s background does not matter
It is important to check the records of your to be tenant. One with good education, family background and stable income group is more liable to take good care of your property and pay rent timely.
10. Builder’s name hardly matters
It always pays to invest on a reputed builder. Falling prey in the hands of any Tom, Dick, and Harry builder might save you bucks initially but in the long run apartments or condominiums by a reputed name in the market appreciate faster and that too by a significant rate.
Say bye to these misconceptions, invest smart and enjoy returns!
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