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Residential Property Investment Myths

Real estate residential property investment is nothing new. People go into it either for personal use or business reasons, both equally important and a gamble. One puts a significant amount of their hard earned resources in the hopes of ripping benefits from the asset either by using it themselves or having it leased or sold to garner monetary returns.

Unfortunately, investing in residential assets is equally riddled with myths and misconceptions just like any other type of investment out there. This can be a huge pain because people never get their facts straight and that can cost them. To help everyone on this, we’ve come up with a list of the said myths. Let’s debunk them one by one.

Myth: “The asset’s value appreciates overtime.”

Fact: Not all the time. There are many factors that lead to the appreciation of a residential property. Plus, their various combinations can lead to different and very varied results. Factors like location, accessibility, safety and security, proximity to significant establishments and employment are only some. You need to research. Furthermore, don’t get us started regarding repairs, maintenance and upgrades. If you know how to handle these investments and if you hold ones that have the potential then yes value can go up but this is not guaranteed to happen every single time.

real estate residential investmentMyth: “Upgrades create more value.”

Fact: If you plan to rent out and sell for income purposes or even think of selling the home you are currently living in today in the future should the need arise, the thought of upgrades can come across your mind. Do they add value? Yes but it depends. Not every expense can be capitalized and not all upgrades can bring the price tag up. Sometimes you might even find yourself spending for an upgrade that doesn’t really add much and ends up more costly than it is useful. To avoid that, it is best to call in the pros to the table. You need guidance and you need someone with the expert knowledge to tell you whether the upgrades you are planning are feasible for the asset’s structure and feasible value and cost-wise.

Myth: “Location is all there is to it.”

Fact: In a residential property investment, a lot of factors come into play. As mentioned earlier we have location, accessibility, safety and security, proximity to significant establishments and employment to name a few. In other words “location” is only one of them. It is an important one but should not be your sole target. Think about it this way. A home that’s close to schools, malls, offices and transportation hubs may sound great but what if it’s flood prone? Would it still be great and valuable? No.

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