“Property Investment”, sometimes is seen as a taboo to many people. You may have seen or read in articles, newspapers or books which people became very rich investing in property or even achieve financial freedom.
But despite the countless number of success stories in property investment, many people are still unwilling to invest in properties.
Each of these people have their own personal reasons as to why they avoid property as an investment tool.
Today, this article shall touch on the 4 common myths for first time property investors.
1st Myth: Too Complicated,
I don’t know where to start investing in property
Property investment seems such a huge subject. There are so many parts that as a first time investor needs to know to invest in property.
If you do a search on Google about how to start in property investment, there are so many information available out there by different people saying different things.
But the bottom line is simply what is your main objective in property investment?
There are 2 main strategies in Property Investment.
The first strategy in property investment is Capital Gains. Most first time property investors look to property investing as an instrument to grow their money. Capital gain is simply to buy a property that is cheap now and sell it higher when the property increases in price.
Many examples are people buying properties in an undeveloped area and after developments in the facilities and infrastructure of the area, the property prices go up.
This strategy requires precise timing to catch an undervalued property that is about to turn valuable. It may seem difficult for the first time investors, thus you need to look out for someone who has experienced and successful in property investment.
One example of a successful and famous property investor in Singapore is Dr Patrick Liew.
The second strategy is Cashflow. Some people buy property with the aim of collecting monthly rent from its tenant. People who use this strategy will need to find a property with high rental yields as compared to the price of the property.
Rental yields will mostly depend on the location of the property and how much the rental rate of the property in that area depends on the supply and demand of the people who wants to live there.
Cashflow is important as it gives you income every month. Finding the right property team or property investment mentor to give you information on how to do it can determine how much cashflow you can get.
2nd Myth: No more cheap properties around and
I don’t want to buy expensive property
“How can you find cheap properties if property prices at all-time high?” is a common question that someone will say when you ask why he does not do property investment.
Of course, most property prices go higher with inflation, demand and supply. Instead of just looking at the prices, another way to find cheap property is to look at the value of the property and the future plans of development around the location of the property.
A piece of property may look expensive now but if there are future plans of development like making that location into a hub or a transit point. This way, the traffic of people will increase and more people want to move to stay there, increasing demand and pushing prices higher.
Bottom line, the property price is definitely a factor in your investing decision but property market crashes does not happen very often. In periods where property prices are very high, you need to find property that are currently undervalued.
Undervalued properties have the most room to grow and you are able to double or triple your money sometimes.
You will need to learn how to spot undervalued properties and this will need time and experience in property investing by yourself or you can always find someone who is a successful property mentor to show you how.
3rd Myth: Too Risky,
I don’t want to lose money in investment
Every investment instrument contains a certain amount of risk. Risk is unavoidable even in everyday activities. Every investment has risks just that you need to learn how to control and manage the risks.
You should not fear risk but instead learn how to control the risk through proper education.
Actually investing in property has lower risk as compared to other investment instruments like stocks, forex or mutual funds because the property market has a slower cycle and you have full control of your own property.
Moreover, property prices will not crash overnight in the next hour so you money invested will not disappear suddenly.
For property investors, in order to lower the risks in terms of market conditions, you need to know how you can manage your risks via mitigation methods such as insurance but it is best if you consult a property expert on this to advise you based on your current property on the best possible action to be taken.
4th Myth: Too Expensive,
I need to have a lot of money to invest in property
Lastly, you might be having thoughts like this in your mind: “Property Investment? I don’t even have enough money to buy my own HDB then how do I find extra money to invest in property?”
Of course it is all about the money and the price! Property investment by the traditional method is to pay the down payment of the property and get a bank loan for the balance.
Especially in places like Singapore where the property is very expensive, people often cannot afford another property after buying one.
However, do you know that there are also great property deals out in the market where you can purchase property with little or no money down?
Now, comes all the skeptics and they will say how can you buy property with little or no money?
Indeed, there are such properties out there!
One example is to look for property owners who are in financial trouble and willing to let go the property cheap or even at no costs to reduce their financial debts.
All you need is to know where to find such properties.
You will need to know a good property network to show you such good deals which are not available in the common marketplace.
Conclusion
All in all, these 4 Myths are just obstacles to hinder your progress into property investment.
Property investment is a very useful investment vehicle to grow your money. You need to find a Property Mentor to teach you and guide you on how to invest in property effectively with low risk.
If you would like to find out how this Property Mentor managed to buy a property with $1, please click below to Read More
