Common Property Investor Misconceptions

27700_Confusion-2

We love meeting people and talking about their property investment dreams and ideas, but sometimes, we are surprised at the misconceptions they have about the business.

Here are just some of the misconceptions people have, and we hope budding investors will find some of this information helpful:

I Can’t Afford It

This is probably the most common issue raised when we speak with people. Reducing costs in some areas and reviewing your current mortgage or loan agreements may result in releasing additional funds you didn’t realise you had. Speak to a financial specialist – in our experience, you’ll be surprised at what they come up with after some number crunching.

You Can Only Invest in Property if You Already Own a Property

This is a common misconception for many first-time property buyers. Anyone can buy an investment property, and indeed, we manage property for many clients who have bought an investment property and continue to live in rented or other accommodation.

Property Always Increases in Value

Generally, yes it does, but on some occasions, property doesn’t increase in value. It’s also good to be aware of property potentials – some property owners have been known to overinvest with their property renovations. The key to property investment is do your homework, speak to specialists and weigh up the pros and cons. This will mean you will find the right property, in the right location at the right price.

You Have to Negatively Gear

No you don’t. The way you gear your property is entirely dependent on what your financial situation is and how you plan to use your property investment – whether it’s for an income now or for the future. Our article on gearing explains the differences between positive, negative and neutral gearing.

You Should Only Buy Close to the CBD

While buying a property close to the CBD does have its advantages, buying in other areas can be a good investment too. If there is a rental market in the area, then the chances are, you’ll make a good property investment choice. Check out our article on where to buy an investment property for more tips.

Property Investment is a Get Rich Quick Scheme

No. Property investment can help you reach your long-term financial dreams, but you need to know what you want and plan to get there. Our article on How to get Ahead with your Property Investment gives you tips on how to set realistic goals and develop property investment plans.

If you are considering using property as an investment opportunity, our knowledgeable and experienced team would love to answer your queries and help you achieve your property investment dreams.

With over 40 years of business in the area, we are one of Newcastle’s longest established real estate offices, so give us a call on 02 4956 9777 or pop into our office for a chat.