PROPERTY investment, it’s something many people do, but not everyone really understands.
Plenty of new and seasoned investors are happy to offer their unsolicited advise if you mention you are thinking of getting into the market, but how much of it should you listen to?
Buyers agent Darren Piper of Universal Buyers Agents reckons there are four big property investment myths.
“This could not be further from the truth,’’ Mr Piper said.
He said each area is divided into several suburbs and each of those operated with different supply and demand drivers.
“In fact, within each suburb of a city, there are usually a couple of districts with different factors that may impact the value of a property,’’ he said.
An obvious exampled was a house with city views would be worth more than another similar house a street away but without the views.
“I’ve heard people say on more than one occasion that properties double in value every seven to ten years. This is simply not true,’’ Mr Piper said.
While it has happened in some hot markets in Sydney and even Melbourne in the past decade it is by no means across the board in other capital cities.
“You can’t generalise the property market and if you take a closer look, you will find that some properties in Sydney and Melbourne have not performed as well,’’ Mr Piper said.
“You can’t buy just any property and expect the value to skyrocket in a few years. Do your research and find a property that has potential to increase in value.’’
Mr Piper said the property market moved in a seven to ten-year cycles and investors often spent a considerable amount of time working out the best time to buy.
“It may make sense to purchase a property at the bottom of the cycle when prices are low, but it is not guaranteed to really make a difference and it isn’t the only factor to think about when investing,’’ Mr Piper said.
“You may score a bargain, but if the cycle stays sluggish for longer than expected, you may also find yourself waiting years for the market to pick up again.’’
This is a classic fallacy that has been floating around the property industry for a while now,’’ Mr Piper said.
He said houses generally cost more than apartments but it was a common misconception that the majority of a property’s value was in the land.
“It has been proven in bustling city suburbs that apartments can rake in just as much profit as the humble home,’’ he said.