6 Real Estate Investment myths busted

Monday, February 15, 2016, 6:00 AM | Leave Comment

Take a good look at these statements: Buying a house for living purpose is a type of investment. One should think about property purchase only in the festive period. Go for a house that is fully constructed, it is less risky.

Buy house locally.

Don’t they sound familiar? These statements have been followed as the golden rules of investment by a majority of real estate investors.

The reason is simple: these are known to be adopted by the real estate gurus who vouch for risk free realty investment.

But, there are no evidence supporting the success of these statements. In fact, over time these have been bashed by the real estate followers as having no credibility in the present day scenario.

6 Real Estate Investment myths busted

Let us see what should be followed by the 21st Century investors who aim at gaining maximum returns.

It is time to bust the myths. Let us start.

  • Myth 1: I am buying a house to live in. This makes me a real estate investor

    You are not an investor until you sell the house and use the money to buy another (and keep repeating this cycle). The house you plan to live in is your asset and not investment.

    In order to become a proper investor, buy houses that you can sell in short term and use that money to buy another one. Until and unless you follow this circle, you are not a realty investor.

  • Myth 2: Buying an under developed house is risky

    The best payment options are given in the development stage. You can check the status of development, the preciseness of design and construction only while the house is under construction.

    Lastly, the price of an under developed project is lower than the launch price.

    According to Harsh Roongta, author of The Complete Home Loan Guide, as long as you understand the risks involved, there is nothing wrong with investing in an under construction property.

    It has been seen that if you make a careful choice of the locality and developer, under construction houses can prove to be a good long-term investment choice.

    Tip: Make a list of all the under construction projects around the country and then choose one for investment purpose depending on your goal.

  • Myth 3: Invest in your locality

    While it is good to invest in a locality you are familiar with, in order to make a good portfolio, it is advised that you broaden the horizon.

    When you invest in a house that is based in a city whose property prices is higher than that in your home city; the level of expected returns automatically rises.

  • Myth 4: The best time to sell my house is the festive period

    The best time to sell your house is when you are ready. Other factors like locality, growth trend, expected increase/ decrease, etc. plays the dominator in it.

    It is said that if you invest Rs. 10 in a festive period, you get Rs. 100 as returns, but ask if there is some proof and the answer comes No. So, sell your house when the market conditions are right and not when you see crackers everywhere.

  • Myth 5: I cannot sell the house myself. I need a real estate agent

    You could not be more wrong. While agents brings in a large number of property seekers, you can do it too! In today’s time you have a number of options from social media to property service providers, which makes you meet the right buyer in no time.

    Some of the leading online property portals have bought buying, selling, and renting at your fingertips.

  • Myth 6: Opt for a risk free investment

    Risk and returns are not poles apart. They go hand-in-hand. You cannot expect to make profits in the long term until you take various calculated risks in the short term.

    It is advised that you do a proper market trend before you make the decision of buying a house.

    For e.g. it is known by the real estate followers that for gaining profitable returns in a metropolitan city, it is advised to buy a house in Bangalore, as the peripheries of the city are on the verge of a very high growth.

    Also, the new launches that are happening all over the city are offering property at very low prices. Thus making Bangalore ideal for flipping houses.

    While Bangalore is fit for purchase of property for short term, Mumbai is famous for its long-term high returns. It will be beneficial for you to buy a 3 BHK flat in Mumbai and then put it on sale after 5-6 years.

    In the end, you will have to take some risk if you aspire to get higher returns.

The current realty market is showing a promising return. It is expected that sales will rise by 1.92 lakh units in the 4 major cities of the country in year 2015 because of the interest rate cut plus stable prices.

Making now the perfect time to start investing. But, before you start walking down the line of becoming a good investor; bust these myths. Do your research on locality, time, project, etc. before you make the decision.

Author BIO

Currently associated with 99acres.com, Tripti writes on real estate market and trends, both national and global.

With a professional expertise in introducing readers to how real estate market functions, she strives to keep her readers updated with every what’s what of the turbulent market.

Apart from writing what keeps her going is petting dogs, and a thick chocolate milk shake.

Get to know more about real estate market and trends follow G+.

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