4 Real Estate Investment Myths That Must Be Busted ASAP
If you’ve been around the world of real estate investment for a while, you probably know by now that almost everyone around you is a self-proclaimed expert. While there are some people who have worked hard and truly deserve the status of being a professional advisor, the internet is sadly filled with many novice voices giving dodgy tips and tricks. My name is Ofir Eyal Bar and I’ve been a real estate investor for quite some time now. With my record of successful investments all around the world, allow me to bust some common myths and help you identify a good deal from the bad ones out there.
Source: https://unsplash.com/photos/JUpaXbh-Fgc
#1 — It’s usually not really a ‘once in a lifetime’ deal
We’ve all been in that situation before when we hear of an investment that we are urged to consider since we’ll never be able to find something like that again. Well, let me tell you now: Investments come and go. Statistically, almost all of them will not be the investment you’ve never been offered before and never will be offered ever again. On the contrary, when someone tells me that something is ‘once in a lifetime’, I have a tendency to think it over more thoroughly.
The same, by the way, go for the old classic ‘now or never’. If someone insists that a real estate investment is ‘now or never’, opt for never. If they give you time to think it through, it sounds a bit safer.
#2 — Nobody really ‘knows the potential’ of anything
This may seem like a tip in grammar than in real estate investment, but it’s important as you’ll see. Potential is not something that is known. Sure, it can be appraised, estimated, valued, calculated, guessed. It can’t be known, since potential will only be fully discovered in the future. No, this is not just semantics we are talking about. This is serious — if someone tries to get you to close a real estate deal by promising a certain return on investment, citing the potential, they are being dishonest with you. What they should tell you is their estimate or prediction on future potential and explain why.
#3 — Every advice you get is relevant now, and only now
In a global reality, the real estate market is very sensitive to current events. Sure, that is true for any market. But while commodity value can be flexible, real estate is not something you can just ‘downsize’ or ‘alter’ — it is both a property and an investment. Therefore, every real estate deal is especially vulnerable to economic, social, political, environmental, and other kinds of circumstances, and you can be sure those circumstances are ever-changing.
That does not mean, in any way, that you should stay away altogether from real estate investments. It is, however, a call for investors to adopt a macro-level point of view. Your real estate asset is physically located somewhere and what happens in that area can (or cannot) affect its profitability.
#4 — There’s always fine print
Ah… the ‘no catch’ promise we all receive when considering investments. Well, you can be sure that when someone is trying to make you close a deal, they’re painting a picture for you. As close as that picture may be to the truth, it won’t be %100 percent there. So, how can you find out what’s being hidden from you? From my experience, the fine print in a contract is a good place to start — its purpose is to give you the unpleasant information your seller is obliged to let you know in some way.
Other than that, you can always ask around. People that have already had experience with a certain location/real estate company/type of investments can give you the information your seller is usually not very happy to provide. Trust your gut instinct as well — this can’t really be explained, but if your ‘inner you’ is telling you there is something wrong with the deal, that’s a voice worth taking into account.
So, to sum it up…
There are more myths of real estate investment deals that need to be busted, but as you can see, the main four I’ve listed here can be avoided with a good sense of judgment. Trust me, I’ve been at it for decades and I’ve seen every type of slick real estate salesman you can imagine. I’m Ofir Bar, I hope this piece of reading was useful to you.
