Investing in real estate is a huge commitment for any individual. This is why most people try to do as much research as they can before making an investment. Unfortunately, however, not all the information about real estate you come across is legitimate. There are many false perceptions people hold about the property sector which can provide you with inaccurate information. These misconceptions can interfere with your hunt for the ideal home. Here are seven of the most common real estate myths debunked to help you make the right decisions when investing in property.
- 1 Myth 1: You Need to be Rich to Invest in Real Estate
- 2 Myth 2: Real Estate Investments are Risky
- 3 Myth 3: Only Properties in Fully Developed Areas are Worth Investing In
- 4 Myth 4: You Should Only Buy Property When the Market is Good
- 5 Myth 5: Brand Names Don’t Matter in Real Estate
- 6 Myth 6: You Shouldn’t Invest In Real Estate When You Are Young
- 7 Myth 7: Your CIBIL Score Needs to Be Excellent in Order to Invest in Property
Myth 1: You Need to be Rich to Invest in Real Estate
One of the biggest real estate myths which dissuade people is the belief that only people who are economically well-off can afford to buy property. However, this is far from the case. Most people who are buying a home use home loans to finance their decision. Home loans can pay almost 80% of the total property value, which means you only need to pay around 20% of the total value from your savings. The loan can be repaid in the form of EMIs which are adjustable. Moreover, the PMAY scheme implemented by the government has made buying a home even more affordable for all income groups.
Myth 2: Real Estate Investments are Risky
One of the most common real estate misconceptions is that buying property is too risky. Investments, by their very nature, involve some amount of risks. However, when compared to other forms of investments such as stocks, bonds and gold, real estate is much less risky. In the comparison between real estate vs stocks, for example, the stock market is marked by greater volatility than the real estate sector. When you invest in real estate, you always have the security of having a place to live, regardless of how the overall market performs. This is something other forms of investment cannot boast of.
Myth 3: Only Properties in Fully Developed Areas are Worth Investing In
One of the biggest real estate myths people believe in while looking for a property is to only consider areas in central business districts. Narrowing your search to only these areas can prompt you to take a bad investment decision. Properties in the central business district are expensive and prices are already at their peak. This is why you should be looking at areas that are going to witness a high future growth. In these areas, property prices are still low but are poised to appreciate highly in the near future. You could get higher returns on your investment when you invest in upcoming suburban areas. This is one of the reasons why you should consider investing in Chennai’s outskirts when looking to buy property.
Myth 4: You Should Only Buy Property When the Market is Good
Anyone with even a rudimentary understanding of economics knows that the market is never stable. When you wait for the market to pick up, then you could be missing out on valuable investment opportunities. Instead of looking at external trends, focus on your own finances. If your income, savings and career trajectory are good, then you should never delay a property investment. Even if the market is bad now, it is certain to pick up soon enough. Buying property when the market is down can actually prove beneficial since the prices will be lower too. This way, once the market picks up, you will have made a very good profit from your investment.
Myth 5: Brand Names Don’t Matter in Real Estate
When looking for property, some people pay more importance to the price than to the brand name of the developer. However, this could prove to be a grave mistake in the long run. When you choose a known developer for your property investment, you can see their past work for yourself. This gives you a good barometer to judge the quality of their construction, punctuality in completion and future value of the property. If you invest in a lesser-known developer, there’s always a chance you might be shortchanged. Lancor is one of the leading property developers in Chennai who focus on quality homes with world-class amenities and facilities.
Myth 6: You Shouldn’t Invest In Real Estate When You Are Young
Many people view real estate investments as something that should be undertaken only when they’re older. But investing while you’re young can actually be a wiser decision. When you are young, you have more working years in front of you to pay off your home loan. Since your career is on the rise, your EMI will be unlikely to make a major dent in your savings. In addition, most financial institutions actually offer lower home loan rates for young people. This is why investing while you’re young can offer you big gains in the future.
Myth 7: Your CIBIL Score Needs to Be Excellent in Order to Invest in Property
Most people don’t have the finances to be able to pay the full value of their property upfront. This is why many turn to home loans to help them finance their purchase. Before they sanction your loan, banks look at your credit-score to judge whether you are a good candidate. In general, people with a CIBIL score of 700 and above stand a better chance of getting their loan approved. Many people believe that without an excellent CIBIL score, they won’t be able to avail a housing loan. However, there are many instances where people with a lower CIBIL score have managed to get a housing loan. Even if your score is low, there are many steps you can take to improve it. For more insights, read more about the Top Tips to Apply for a Home Loan to learn how to get your loan approved quickly.
Keeping these real estate myths about buying a home in mind will help you identify accurate real estate facts and guide you towards making a good investment. If you’re ready to finally buy a house of your own, visit Lancor to find the best homes in Chennai. Our properties are marked by an unbeatable quality of construction available at competitive prices.