Common myths about Real Estate

1. You need to be wealthier to invest in real estate.

It is one of the major myths about real estate that you must have to be richer, you must have cash flow in your hands to invest in real estate. Well, this is not true, you just need to be creative, collect more information and do proper research on where you can start investing in it. Also, banks are available to provide you with a mortgage to invest in real estate. You just need accurate information and guidance from an experienced person.

2. Buy Property when the market is good.

This statement about real estate is false here because we all know the real estate market is volatile, and prices of property go up and down. So invest in the area when the market condition is not good enough to invest and make sure the prices go up soon. Buy the property and hold it once the market is back to pace then sell it.

3. Buy Property in developed areas only.

This statement is quite similar to the previous one and investing in developed areas is not a good decision because the prices are already high in developed areas. I would recommend you to invest in developing areas where the prices go up in the near future.

E.g. Investing in Greater Noida West is a better decision than investing in Noida because Noida is developed and prices are very high here while in Greater Noida West the prices are lower and the prices will go up shortly. Read the complete article on comparison of these two locations.

4. Real estate investments are riskier.

When it comes to great revenue everything is riskier and real estate involves a huge commitment of funds, yes it is risky but not that risky. It’s like we all are going to the office and we pass the traffic. How about if we met in an accident? There is a risk to our own life right. Subsequently, you have to take a little risk in investing in real estate and most of the time you’ll get fruitful results in real estate investment. So, it is not as risky as people say.

5. You can flip your way to getting success.

Another myth about real estate is to get success buying the property and selling it at a higher price. It is not easy and also not feasible. You can’t get success or become rich in buying and selling property. It involves passion, determination and consistency to achieve this. In India, buying property means a lot of emotions are attached and buying property in one year and planning to sell it in the next 5 years doesn’t make sense because people do their calculations like ohh! He is selling this in only 5 years, there must be something wrong with the property. By just flipping your way you can’t get success.

6. What you see is what you get.

No, this is again a myth. It is not always true that what we see is what we get. As a real estate expert, you get the best deals off the market. You just need to do proper research and math. You won’t believe there are N number of deals present in the market which are under-rated and it’s your job to find such properties for investment to get better returns. 

7. Everything is negotiable.

Having this belief in mind many investors have lost good investment opportunities. It is good to open for negotiation but when you realize that the other party won’t settle down and the investment makes a sound for you then I would suggest you close the deal otherwise you may lose one of the good deals.

E.g Gaurav and Saurabh are two cousin brothers, Gaurav buys a 300 sq meter plot in jewar at 35 lacs in 2019 and today the market price of his plot is approx 75 lacs. On the other hand, Saurabh decided to negotiate more on price as the result he didn’t buy the plot and today he is staying in a 2 bhk apartment in Noida extension whose price is 55 lacs. 

8. The best loan is the one with the lowest payments.

It is a myth that people think that they should take a loan on the lowest EMI. If they do a proper calculation of home loan they would realize that they had burned their pockets because the lowest EMI means a longer time which means paying more interest. It is better to take a home loan on 50% amount and the rest 50% pay by yourself. For better understanding have a look at the calculation below, 

Flat Price	80 Lacs
Down Payment	20 Lacs
Loan from Bank	60 Lacs
Loan Interest	6.9%
Monthly EMI	46,158
Total amount paid to bank after 20 years	1,10,78,032
Interest amount paid to bank after 20 years	50,78,032

Here, he pays 20 lacs as down payment against the loan amount of 60 lacs at a home loan interest rate of 6.9% which calculates to monthly EMI as Rs. 46,158 and he paid the total amount to the bank after 20 years is 1,10,78,032 which is double of his loan amount. The interest amount paid to the bank after 20 years is 50,78,032 which is 84.6% of the total loan amount. Subsequently when your financial part is strong then only take home loan of higher amount otherwise, i would suggest you to take loan of minimum amount as possible.

9. Bad Timing & Not enough Time.

Some people say they don’t have enough time to think about investing in real estate, it is risky, and I have other work to do and all. It is all their excuses and myths. In the reality if they dive into real estate investment they would realize why they have not taken this step earlier. And there is no bad timing for investing in real estate.

10. Brand Name doesn’t matter in real estate.

Buy the property from renowned builders who have a good record in terms of property possession as well as the quality of material used in construction. People have the biggest and one of the risker myths that brand name doesn’t matter in real estate, actually it is 100% matters because you have done a lot of research in finalizing your property and how could you buy that from an unknown builder? If you make that mistake you’ll incur huge losses because investing in real estate means putting all your eggs in one basket.

Conclusion

Investing in real estate is a good option and discussing your decision with too many unaware people may lead to a bad decision. I would suggest you make a checklist on your own which includes your need and want from that investment and take guidance from the reality experts. We carpet area have experienced experts and we would love to help you throughout your buying process. 

We have covered almost all the common myths about real estate. If you have any other queries please write it down in comment section and we’ll get back you shortly.