5 Property myths that will NEVER be true

You won’t have to look far to hear an opinion on property.

From dabblers through to multi-million-dollar portfolio owners, it’s an industry with plenty of advice coming from all corners, and plenty of emotion attached to each opinion.

In fact, I’ve often said there are 25 million property experts in Australia

But I should warn you: some things you’ll hear that are simply not true.

Forewarned is forearmed, so take note of these misguided property myths that consistently make the investor circuit.

1. Buying near capital cities is a certain money-spinner

No. Capital cities have the trademarks of high demand, which stems from consistent employment opportunities, diversity of economy, and land constraints.

However, that doesn’t automatically equal a successful property.

Of course location will do most of the heavy lifting in your investment property’s performance, but the right location still needs ammenities, great infrastructure, proximity to schools, shops and hospitals, and draw a demographic that will continually improve and rejuvenate the suburb to ensure its future growth.

Not to mention that some city suburbs can actually present dangers to investors – low yields, high prices and oversupply being just a sample of the issues investors can run into in some of the inner suburbs.

2. Property prices double every 7 – 10 years

This is an endemic myth that puts a lot of investors at risk because they think they can just buy any property and it will increase in value

It’s based on the idea that a well-positioned property in a capital city will experience an average 7% annual growth, resulting in values doubling in around 10 years.

And while that figure of an average of 7% capital growth is about right over the long term, that also means that around half of all properties won’t perform anywhere nearly as well as that.  (That’s how averages work!)

However markets move in cycles, and each market – depending on location, price points and property types – will fluctuate at different times.

To say that each one of those cycles is likely to double in value is an incredibly misleading and dangerous strategy to rely on.

3. You can’t lose with property

Yes, you can, and I’ve seen it happen.

Property doesn’t equal profit every time.

Just look at the results of the Corelogic Pain and Gain report which shows the percentage of properties that were resold at a loss.

No every property is an investment grade property.

And many beginning investors seem to make the same mistakes – they buy a property because it’s around the corner, or simply because it’s within budget without doing the local area due diligence.

Knowing the local area because you live there is very different to understanding the property fundamentals of an area.

That’s why smart investors seek expert advice from independent property strategists like the team at Metropole to guide them through the process, and ensure they’re making sound decisions in line with a proven strategy.

4. House are a better investment because of the land.

While there are investors who will argue black and blue that the land holds the value, not the bricks on it, that’s not exactly right.

Yes it’s important to own a property with a high land to asset ratio, but not all land is created equal.

I’d rather own a 10th of the block of land under an apartment building in an expensive exclusive suburb than acres of land in regional Australia.

It’s important to remember that desirability, demand and location are also fundamental components of a successful property.

And of course a lot has to do with your budget.

Your price point might only allow you to buy a unit or townhouse in your desired suburb which shows potential for strong growth and that may be better than buying a house in an outer  suburb with less capital growth potential.

When it comes to property types, we simply can’t paint the market with such a broad brush!

5. It’s too late for me to invest

Sure It’s tougher to reap the rewards of property growth if you’re older, but it’s never too late.

Even in your 60’s, there’s still the opportunity to amplify your retirement funds – and don’t forget the legacy you’re building for your own children and grandchildren.

Nowadays, the option to utilise a self-managed super fund also means you’ve got extra leverage to purchase a property that can potentially generate more weekly cashflow than your superannuation fund, particularly if you don’t have the finances to carry you through all of your twilight years.

Never assume you’re out of the game because of age or finances.

If you’re looking at buying your next home or investment property here’s 3 ways we can help you:

Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.

Why not get the independent team of property strategists and buyers’ agents at Metropole to help level the playing field for you?

We help our clients grow, protect and pass on their wealth through a range of services including:

1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.

from Property UpdateProperty Update https://propertyupdate.com.au/5-property-myths-that-will-never-be-true/