Common Real Estate Myths Need to Know
Investing in the real estate market is certainly a pivotal decision because a huge commitment is needed in the process. That’s why most of the people used to do thorough market research before investing a single penny. But very often it has been found that all the knowledge that you have acquired get overshadowed by exaggerations or myths about this sector. All these myths or false perceptions will not only provide you with inaccurate information but also create a hindrance in your hunting process.
In this article, we are going to debunk some common real estate myths that you should know so that you can make a wise decision regarding your property.
1. You Should be Rich Enough to Invest in Real Estate:
This is the biggest real estate myth which often dissuades people to make an investment in this sector. Buying a flat is a good decision and people who are economically rich and stable can only afford to buy a property. But the reality is far away from this belief. People can take home loans from banks or other financial institutes if they want to purchase a home. Most of the home loans nearly pay 80 percent of the total property value. This means you only need to pay around 20 percent of the value of a property. You can repay this loan in the form of EMIs which are quite flexible and adjustable. Moreover, the government has implemented PMAY scheme for all income groups. Under this scheme, now property investment has become easier and more affordable.
2. High Risks are Associated with Real Estate Investment:
This is another misconception about the real estate industry. It is true that every investment involves some amount of risk. But real estate investments are less risky as compared with other investments like stocks, bonds, mutual funds, gold, etc. If you compare between the real estate market and the stock market, you will certainly agree that the stock market is more volatile and unstable than the real estate industry. Due to lack of knowledge, most people believe that real estate investments are riskier, but if you have done your homework properly, then there is no reason to fear for investing in a property deal. In the real estate market, you will get the security of having a place to live irrespective of how the market performs.
3. Properties that are Situated on 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 you must know that 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. That’s why you should invest in those areas which will witness high growth within a few years. Because in these areas, property prices are still low, but the price will go high in the near future. If you want to get a higher return on your investment, invest in suburb areas.
4. All Real Estate Agents are the Same:
One of the most popular myths in the real estate industry is all real estate agents are the same. Because of this myth, very often buyers and sellers make mistakes while choosing the real estate agent who will represent their individual interest. A real estate agent can be two types: a buyers agent (who usually works with buyers) and a sellers agent (who usually works with sellers). So, there is a striking difference between these two and that’s why don’t mix them. Moreover, experience plays an imperative role in this sector also. A real estate agent who is working for 2 years in this sector is not going to have the same skill set, experience, and knowledge as an agent who is working more than 10 years in this sector.
5. Purchase only when the Market is Good and Favourable:
People who have a rudimentary knowledge of economics should know that the 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 path are good, then without wasting time go for property investment. It would be a prudent decision if you purchase a property when the market is bad. Because the prices will be less which means you will get financial benefit. When the market picks up, by selling your property you can make a profit from your investment.
6. Brand Name doesn’t Matter in Property Investment:
When people are planning for a real estate investment, they keep their focus mainly on the prices of the properties rather than focusing on the brand name and reputation of the developers. But if you want to make your real estate investment worthy, always choose a developer who holds a strong portfolio and market reputation. If you purchase a property from eminent builders in Thrissur, you can easily judge their quality of work, punctuality, and future value of the property. By evaluating their previous projects, you can also make a conclusion about whether the builder is trustworthy or not. On the other hand, if you invest in a lesser-known builder, you might face some issues in the future in terms of quality or punctuality.
7. Don’t Make any Investment when you are Young:
Most people believe you need a lot of knowledge and skills before investing anything in the real estate market. That’s why young people should not go for any real estate investment. This kind of investment should be taken when you are older enough. But in reality, the scenario is completely different. It would be a wise decision if you make a real estate investment at a young age. Since you are young you will get more working years in front of you. This means you can easily repay your home loan. Moreover, once your career will rise, your EMIs won’t burden your savings. Most of the financial institutes offer low home loan rates for young people. These are some reasons which imply that it would be a great decision if you make a property investment at a young age.
8. You must have an Excellent CIBIL Score before Investing in a Property:
These days most of the people used to take home loans because they don’t have sufficient financial balances to pay the full value of their property upfront. That’s why they took home loans which will make the purchase process easier for them. Before sanctioning your loan, the banks usually check your credit-score to judge whether you are a trustworthy candidate or not. Those who have a CIBIL score of 700 and above are most eligible for getting the loans as compared to those whose CIBIL scores are low. But there are a plethora of instances when people managed to get housing loans in spite of their low scores. If your CIBIL score is low, then there are many ways by which you can uplift your score. These days, the internet is crammed with various information. So, before applying for a loan, you must go through some information like how to apply for a home loan or how to get a housing loan quickly and so on. You can check out the home loan process in India.
9. You Don’t Need a Home Inspection:
A proper home inspection is a pivotal step in your property investment process. But most of the people prefer to save money by skipping this professional home inspection step, rather they hire a friend or a family member to look over the home. Though this is tempting as you can save a few pennies, still, always go for a professional home inspection process. Because a professional home inspector used to look for more than 1,600 specific items in the home. With his skills and knowledge, he will help you to avoid tricks that hide a home’s flaws. If you hire a friend or a family person for the home inspection, you may face unpleasant surprises after your purchase. So, it is always advisable to hire a home inspector who has high customer ratings and feedback. Try to accompany him through the inspection process and ask him to explain everything in detail regarding what he has seen during the process.
10. Always Set the Price for your Home Above the Market Rate to Keep a Space for Bargaining:
Most of the sellers usually keep the price of their home at a much higher price than the competitive rate. Because they believe that if they don’t ask more, they will never get more. But the reality is totally different. If you quote a higher price for your home, it will stay longer on the market and will generate less curiosity and interest. Ultimately, you need to sell your home less than the market price. So, it is advisable to quote a competitive rate if you want to sell your house on time.
These are some real estate myths or misconceptions which you should keep on your mind if you are planning to buy flats in Thrissur or somewhere. These myths will help you to identify the actual facts and will guide you to make a wise decision regarding your property investment.
Hi-Life Builders is one of the best builders in Thrissur. Apart from building wonderful homes, our portfolio includes home care, resale, and home loan assistance and you will be happy to know that we have a dedicated team for after sales service and property management service. For further information on our project contact us now!