Busting 10 Popular Myths About Property Investment
The real estate market in the UK is constantly rising and evolving. From hunting the right property to getting approved for the fast bridging loans, the home-buying process can get extremely stressful, especially for first-time buyers. Everyone seems to have an opinion about the real estate market. In fact, there are so many myths about buying a home that it makes difficult for property investors and buyers to segregate facts from fiction.
In this post, we aim to debunk 10 popular property myths that may be preventing you from purchasing your dream home.
Myth #1 – Property investment is high-risk
Wherever money is involved, it is impossible to avoid risk. Even if you choose to put all your money in the bank, there is still a chance that the bank will go bankrupt and you may end up losing your hard-earned money. But, with property investment, if you properly do due diligence and invest wisely, you can minimise the risk and expect to yield stable returns and capital appreciation. Although this depends on several factors, you can see the value of your property rise significantly over the period of ten to fifteen years.
Myth #2 – Now is not the right time to invest in a home
Whether a home is a good investment or not depends on many factors, such as the location of the home, its condition, how much it costs and what are the housing demands in that particular area. There are always some opportunities around if you know what to look for and where to look. Furthermore, bridging finance London has made it even easier to buy a property in the UK. Therefore, rather than waiting for the time to turn in your favour, the right time to buy a property is when you are ready to go ahead with the purchase.
Myth #3 – You need to have a large sum of money for property investment
This is a popular misconception among UK residents that you need a large sum of money to start investing in the property market. However, that is not true. The key to getting started is to leverage your income and equity, and use it to create the right strategy to meet your financial goals. If you don’t have sufficient funds to purchase your dream property, you could use a bridging loan that will help you raise funds to complete your purchase.
Myth #4 – Property investment makes you rich really quick
Whenever we invest in anything, the first question we ask is how quickly and how much return will I get on my investment? Well, flipping a house can help you make money in a shorter period, but it is also risky if you are not an expert. There are so many traps that can quickly turn profits into significant losses. If you are new to property investment, we recommend following the strategies that are proven to provide reliable, long-term returns.
Myth #5 – Property investment requires expertise
This is true to some extent, but not entirely. Rushing into property investments without thorough research and preparations can lead to considerable financial losses. However, when you seek guidance from experienced advisors, they can help you walk through crucial phases, such as research, planning, acquisition and management. Using assistance from experts can be effective in risk mitigation, which can otherwise be impossible to attain if you choose to step into the property investment market without any experience.
Myth #6 – You cannot get finance with a low credit score
Having a good credit score is essential for securing most mortgages, but there are certain financial instruments, like bridging loans that don’t require income proof or credit rating to access the loan. Even if your financial situation is not good, you can still qualify for the loan. Whether you are buying a property for your personal use or as an investment, you just need to put necessary collateral and demonstrate your ability on how you will repay the loan in order to be qualified for bridging finance.
Myth #7 – Location is everything
The location of the investment property is indeed important, but it is not everything. Neighbourhoods in London are constantly evolving, so an area that may not seem ideal now may develop into something greater in the next few years. Conversely, an area that seems a perfect location now may turn into a less than ideal location after a few years. Choosing the right location should be on top of your home-buying checklist, but it should not be the end of your real estate search.
Myth #8 – Property investment involves a lot of time and hassle
There are so many things involved with property investment, such as finding an ideal property, doing due diligence, raising funds and completing the legal transaction. Property investment does take more time and hassle if you choose to do everything on your own. But, if you hire professionals who are experts in their respective areas, the whole property-buying process can be simplified. The professionals will help you find the right property, conduct a property survey and complete the legal paperwork to make sure the property you are purchasing is rightfully yours. This can also help you prevent costly and time-consuming mistakes down the road.
Myth #9 – You don’t need a real estate agent
Many people feel proud about finding their dream homes through the internet. They think they saved the money by not hiring an agent. Buying a property in London is a complex process. And, if you are a first-time buyer, you may run into costs you weren’t prepared for, such as mortgage fees, surveyor fees and home inspection costs. Hiring a real estate agent can help you find a property that meets your budget and lifestyle, advise on whether the asking price is right or higher than average and even negotiate on your behalf.
Myth #10 – Buying off-plan property is inherently risky and costly
Buying off-plan means purchasing the property before it is built, and you move in when it is completely built. There are some risks with buying off-plan, such as the developer deceiving you into buying the property and then running away with your money. However, there are many pros of buying off-plan when you invest money with a reputable developer. When you purchase off-plan, it will likely cost you less than the actual property value. And, if the property is being built in the happening area, its value is likely to increase by the time it is ready.
Conclusion
Property investment in London is brimming with opportunities, but it is often turned down by potential investors due to pervasive myths. We hope busting these misconceptions helps you in making informed decisions regarding your next investment property development finance in London. Despite prevailing risks, the potential for long-term stability and returns in the London real estate market is huge. Remember, thorough research, wise decisions and expert help are keys to success in the property market.
