While successful property investors follow a proven set of rules, the majority of investors believe in widely perpetuated myths about property investment.
Now it’s not their fault, it’s logical to believe that if so many people keep saying something like “location, location, location” it must be true.
But that’s not necessarily the case.
So let’s explore and, more importantly, debunk some of the most commonly believed myths.
In this video we discuss the following myths:
1. Property values double every 7- 10 years
No they don’t – only Melbourne Sydney and Canberra growth outpaced inflation and not all properties in these cities grew in value.
2, Location, location, location is all you need to know about property
It’s just as important to buy the right type of property for the right price in that correct location.
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- Also read:Questions and answers: Inflation & interest rates
3. You make your money when you buy property – so buy cheaply – look for a bargain.
You make your money by purchasing the right property not by buying a cheap property
4. You should always buy in your own backyard.
Logically it’s fair to assume that sticking to the area you know so well because you’ve lived there for the last ten years makes perfect sense? Well, not really.
5. Spot the next big thing and you’ll make a killing!
Attempting to identify the next real estate boomtown – otherwise known as buying into emerging markets or “hotspotting” - is speculation and not true property investment.
To “invest” in property requires the intention of generating long-term capital growth that tracks above average long-term price growth for the area.