7 Real Estate Myths Debunked

I have always considered real estate investment as a man with a big purses’ game. In fact, it had always been the forbidden ground for me until the day I simply took the plunge. And to my surprise, I realized that all of us have many misconceptions and prejudices regarding real estate that hold us back. The misunderstandings are far so great that they had taken to become mythical perceptions. Here are 7 real estate myths debunked.

# Myth 1:  Real estate is a risky affair

Isn't any business a risky affair? Undoubtedly, real estate as a sector has always contributed to the growth of an economy. Real estate enables you to create assets that have always appreciated in value. There is no denying that risks are involved. However, if you are well prepared and educated about the process and the methods of investment, you can minimize the risk.

Key things to remember:-

• Do not put all your eggs into one basket, it is always advisable to spread your investments and not put all your money into one investment
• Real estate should not be where you are investing all your money; especially when you are a novice you should try other avenues as well, and know which investment option you have affinity towards
• Never take too many loans for your real estate investment

# Myth 2: Great location makes a great deal

This is one advice you must have heard over and over again, right? But it could not be more wrong in this context. The formula is simple.The lesser your buying price and the higher your selling price, the better your investment. For instance, the prices in Nelamangala (Bangalore) have gone up substantially after the elevated highway that considerably shortened the driving time from 75 minutes to 20 minutes. Rajaji Nagar (Bangalore) saw price appreciation because three real estate majors launched projects there. I suggest, track the Planning Authority website\news stories and stay updated on upcoming arterial roads or metro rail connections and you will know for yourself areas of potential growth.

# Myth 3: Lady luck needs to be with you for success in real estate

If the four leaf clover is what you fall back on for all your decisions then think twice. Leaving out the unexpected and unseen situations, which are completely out of one’s hands, but if you think in general all the successful realtors depend on luck for their deals, then it’s a warning sign. For experienced investors it is a well thought-out decision that is a good balance between insight, research and some instinct.

# Myth 4: I need a pile of cash for buying that property

On the contrary, most of the successful realtors will tell you that they started with almost nothing. They are many options to get your boat sailing like partnerships, mortgage loans, etc. What you need to see what suits your purpose and how fast you could return them with some surplus as your reward.

# Myth 5: I am too late for good investment options

Always remember, as long as there is opportunity of growth there will be good investment options. It is never that good options run out, but what happens is we tend to get smug and we stop looking at only some pockets. With high rates of urbanization, scope for investment is only getting better.There is a buffet of investments in real-estate itself, residential plots, pre launch offers, shops in gated communities, shopping spaces in malls, commercial office spaces…A good investor will look at mix of these options over a period of time.Expand your horizon; stop concentrating on just one area, as a potential investor.

# Myth 6: Real estate is a lone man’s game

Have you ever considered real estate investment with several like-minded partners a thought? It spreads out the risk and the investment capital can also reduced substantially.  Further collective decision-making tends to be more rational and balanced, whereas individual mindset generally tend to swing between panic and greed.

# Myth 7: I should not borrow

Do not feel guilty about borrowing. To reiterate, world’s greatest fortunes are built upon borrowed money.  Don’t be conservative about taking a bank loan or from a friend. This will help you start your income generating business, which in turn will help you repay the loan.The thought of starting your own real estate business may be intimidating at the moment. My advice, don’t let the grandness of the term get to you. Consider it as your pet project and nurture it the way you would handle any other interest of yours and slowly but surely you will reap benefits.