Property Investment Myths
There are lots of myths that many people believe about property investment, but we are here to clear them up. Having all the facts can be useful whether you plan to invest or are just plain curious about the truth. Check out five rather common myths we have heard about.
You Have To Be Rich to Invest
Not just rich people can invest. More and more people are finding that it makes sense to use the first home they buy as their first investment property, and you definitely don’t have to be rich to own one home. Some even simply invest using the equity they already have on their current home. These tactics show that you do not need a lump sum of money to invest, though clearly it can be helpful!
Property Is Guaranteed to Rise in Value
Though property is often considered the smartest investment you can make, it is not fool-proof. This is because property does not always rise in value. No one can predict the property market with guaranteed results, even if they have carefully studied its history. That’s why property investment is still a risk, no matter how experienced you are at investing.
Everyone Invests in Property Lately
We do acknowledge the sharp increase in investors lately. This trend is mainly due to the tax incentives and financial rewards many people have heard about. But in reality, not everyone can or will invest in property. In fact, only a small percentage of people actually invest, especially when it comes to multiple properties. And as you might guess, not everyone can do it well, which leads to
many beginning investors quitting this journey almost as soon as they start.
You Have to Lose Money When Investing in Property
Some investors choose the tactic of negative gearing, in which they borrow money to pay for property that actually loses money during the first few years. The reason for this is the tax deduction that is available when your asset results in a loss. However, negative gearing is not required for property investment, and it is not even advisable in many situations.
All Debt Is Bad
Not all types of debt are bad, especially when some can lead to you making money. When you buy an asset that is likely to appreciate, such as real estate, you have a good type of debt. As long as you do your research when buying property, making sure it is of impressive quality and in a good location, you will likely not regret your choice to start investing in property.