Debunking Real Estate Myths and What Newcomers Need to Know

Real estate investment is a huge deal for us Indians whether it is commercial property or residential property. It is more of an emotional process, rather than a logical one. There’s a unique happiness that comes with living in your own home. It’s yours, you bought it, you own it, and you can decorate it as you want. Another major factor why we aspire to buy a home is because we can. With the easy availability of home loans today and the relatively low interest rates, people in their twenties are able to own lavish homes that wouldn’t have been possible otherwise.

Real estate trends in Pune suggest of a sizeable population in their twenties and early thirties which can afford to invest in properties. Rising disposable incomes, immense employment opportunities along with affordable and premium housing options are the major reasons to invest in Pune.

However there are some misconceptions and myths about the real estate that deter you from taking the plunge. Let us discuss some of them that plague buyers & sellers alike.

Common myths about real estate

Buying or selling a house is not something most people do every day. You may do it once a decade, or even once in a lifetime. Although most people enter the world of real estate only rarely, they all think they know how it works based on the experiences of friends and family members, stories they have heard and things they have read.

In recent years, technology has radically changed the way homes are bought and sold, and yet some aspects of real estate are the same as they were when your parents bought their last home. If a long time has passed since your last transaction, you may be surprised at how much has changed.

The Internet has made much more information available to consumers, but not all the information is equal, or even accurate. Read everything you see on the Internet with a grain of salt. The danger with believing everything you hear or read is real estate myths can cost you money when it’s time to buy or sell a home.

Here are the most common myths that can trip up buyers and sellers:

1. Set your home sale price higher than what you expect to get

Listing your home at too high a price may actually not get you a buyer. That’s because shoppers and their real estate agents often don’t even look at homes that are priced above market value. It’s true you can always lower the price if the house doesn’t garner any offers in the first few weeks. But that comes with its own set of problems. Buyers are highly suspicious of houses that sit too long on the market.

2. You can get a better deal as a buyer if you don’t use a real estate agent

That’s a false premise. Although there is no brokerage involved however you must take into account that buying or selling property requires a lot of paper work that the agents may do for you. Also the agents have more knowledge about other projects in that locality fitting your budget and may propose better options to you. Besides these agents have better knowledge about that area’s social infrastructure). So while you might save a few bucks while buying or selling your property, be prepared to take up the leg work involved.

3. You can save money selling your home yourself

Some people do successfully sell homes on their own, but they need the skills to get the home listed online, market the home in several publications to attract prospective buyers, negotiate the contract and then deal with any issues that arise during the inspection or loan application phases. It’s not impossible to sell a home on your own but it’s a tough grind.

4. If a property is for sale, then there must be something wrong with it

Don’t psyche yourself out of a great opportunity by over thinking. As always you should do your due diligence to research a property and seller to find out if it is the right fit for you. However, don’t assume that because a property looks too good that there is something wrong. Some investors want to reinvest in a bigger property to increase their earnings. Others may be selling to prepare for retirement. Like any investment, you should do your homework when researching properties and funding. You should also consult the experts. It may be cheaper to do it yourself at the moment, but that could lead to costly mistakes in the future.

5. It’s too risky

Every investment comes with risks. Every person also has a different level of risk that they are comfortable with. Some investors prefer to use triple-net leases because then the tenant handles all property expenses, which lowers the risk for the investor. In terms of risk, real estate is just about the safest investment you can make as it consistently outperforms the stock market and is an actual tangible asset you can touch and feel.

6. You need a loads of money for investment

Lenders will give you loan for commercial real estate investment if you can show that the income potential is worth it. In commercial real estate, the average return on investment is 6-12% because the income stream is relatively consistent.

7. Good deals are hard to find

Not really. There are always good investment opportunities in commercial real estate, but consulting professionals who specialize in this area is the key to finding them. By working with a commercial investment broker or expert, it opens up your options.

8. Properties located in fully developed areas are worthy only

This is another biggest myth that most people believe while they are planning to go for a real estate investment. People always want to invest only in the prime areas which are well-connected and properly developed. But these properties on the prime locations are quite expensive and prices are already at their peak. So, only a few people can afford to invest in these areas or locations. You must invest in those areas which will witness high growth in future because in these areas, property prices will be low.

9.  Purchase only when the Market is Good

Market is never stable. If you wait for the market to pick up, you will certainly miss some valuable investment opportunities. Instead of focusing on the external parameters, you should focus on your own financial status. If your income, bank balance, and career allows then make investment right away.

There is plethora of information available on the internet about real estate buying and selling processes, terminology etc. Unfold the myths and make an informed decision before you take the plunge. All the best!