Horror stories about the real estate industry are numerous, yes. But this is because some investors and newcomers weren’t aware of the risks and/or have a low tolerance for them. They probably didn’t listen to expert advice, either. We’ll bust some more of the common myths out there, and maybe then your mind will be slightly more at ease.
- It’s best to wait until I’m ready
This is a thought based on fear. You will miss more opportunities the longer you wait. That office space or single family home you had your eye on will get snapped up as well.
Waiting is certainly advisable if the conditions for buying aren’t right e.g. it’s not affordable or you can’t get another loan. It’s important though, to be aware if you’re making a logical decision or holding yourself back. When in doubt, speak to your financial planner or a mentor who has more experience in real estate.
- Finding a tenant is going to be easy
Tenants are some of the pickiest people on the planet, and rightfully so. They’re choosing their future home or workspace. You must meet their idea of what they want their living or working space to look like.
You can rely on your realtor to market your property correctly. You can’t rely on ‘open houses’ to bring you a tenant; people might be genuinely interested but most visitors are passing through, picking off what they don’t like before they come across the right fit.
- Young people can’t afford it
Yes, more horror stories. But people in their 20s have just as much buying potential as other investors. It’s a matter of how prepared they are. Sensible investors, new or experienced, listen to expert advice from the people who help them buy the property and manage their portfolio. This includes the financial planner, conveyancer, accountant, mortgage broker, and the property manager. There are also incentives, like government packages, that help first home buyers with their purchase.
- Debt is the worst
Your credit card debt is an example of this. But not all debt is made equal. You will have some amount of debt after purchasing your first piece of real estate but the rental income will slowly fill up the savings account.
Equity is also a way to buy your next property. This is the purchase price of the property minus how much you owe. This is an example of good debt. You can use the equity balance towards another property purchase.
Need more reading material? Look below: