The property market, like any other investment market, tends to attract an array of myths, rumours and untruths. If you read the general press you would be forgiven for assuming that making money in property was simply a case of sticking a pin in the property sales section of any newspaper, buying the property, sitting back and waiting for the money to roll in. If it really was this simple then everybody would be doing it, stock markets would be second choice to property and we would all the counting our profits. So what property myths should you be aware of?
Property prices always go up
History shows us that in general, taking into account all types of property, the value of houses does tend to rise on a long-term basis. Under the surface there is an array of cyclical performances with different types of property and different areas. Research and more research will always win the day when it comes to property investment, picking the right type of investment, at the right time in the right area. House price indices will give an idea of the general trend but by definition, some types of property will outperform the general trend and others will underperform.
All property is the same
When we talk about a house many relatively new investors will automatically assume the housing market is effectively one market. This is certainly not the case with an array of different types of property including holiday homes, flats, terraced houses, semi-detached, detached, need we go? As with any investment you need to do your research on the particular popularity of different types of property in your chosen area. Do not automatically assume that all properties are the same and will therefore perform in the same manner.
Property is a sure fire winner
Even though the long-term trend in property/houses in the UK and other developed countries tends to be positive, not only do you need to pick the right property, at the right time, in the right area, but also manage your finances. Overextending yourself could put your investment portfolio at risk, lead to fire sales and potential losses. So, not only do need to research the areas and types of property which offer good value but you also need to ensure you have some “headroom” between your financial power and financial liabilities.
Home improvements help to sell properties
There is nothing wrong in a lick of paint and a few general running repairs but the idea that you have to undertake significant home improvements to sell your property is something of a myth. It is highly unlikely that any potential buyer will have the exact same decor style in mind and therefore they will probably look to revamp and redecorate if they purchase your property. Of course, your house must look clean, tidy and shown to its best, however, overdoing home improvements is an easy trap to fall into.
Price your property high to get a lower offer
There is some sense behind the strategy of pricing your property high with the expectations that investors will look to undercut your “price”. However, this is not always the case because sometimes overpricing a property (or pricing the property towards the top end) can put off those looking for value investments. If your starting point is too high they may just walk away. This is one of the more popular property myths!
Wait for the selling season
Historically there were times of the year which were more popular when it came to property sales but the Internet has changed much of this. The ability to quite literally browse through any houses for sale 24/7 on your home computer or your smart phone has to a certain extent negated the seasonal effect. So, if you have a property ready for sale put it on the market as soon as possible. Buyers will always be watching the markets, looking for value and they will not be bothered whether it is in season or out of season.
This is one of the more popular property myths – ask yourself this question, have you ever stopped looking to buy or sell a property because of the season? Value is what leads markets so don’t believe all of the property myths you read.