So, property investing, it’s a bit of a maze out there, right? Lots of people are saying this or that. Who knows what to believe?
Yeah, it could be a jungle of information. That’s for sure.
That’s why I’m so glad we’re diving into this article today. Uh, pasted text.
It’s like they wrote it just for our show. Eight big property myths we hear all the time.
Yeah. Hopefully we can clear some of that up for everyone.
Myth busting time. Love it. Let’s jump right in, shall we? Myth number one, property investing is only for the rich.
Feels like I hear that one every day.
Yeah, that’s a common one for sure, but it’s not really giving you the full picture, you know.
Okay, so what is the full picture then?
Well, I mean there are like almost 2 million property investors just in Australia, right? So
2 million really
1.8 million to be exact.
Mhm.
Which means a lot of ways people, not just the super wealthy, are investing.
Okay. So it’s not just a millionaire’s game then. How does that even work?
Well, lots of investors start with leverage. So, they’re using the equity they’ve built up in their current place to get into the market.
Ah,
or you’ve got options like buying off the plan. Securing a property at today’s price gives you some breathing room to get your finances sorted before settlement.
Smart.
Exactly. Makes it way more accessible than people think.
Okay, that’s a good myth to bust right out of the gate. On to myth number two. Property prices always go up. Hmm, I don’t know about that one,
right? Sounds a little too good to be true.
It does, doesn’t it?
And you know, it’s not always the case. Property can be a good investment, sure, but it’s important to keep in mind that markets, they go up and down. There are cycles to this.
Okay. So, give me an example. When has that happened?
Think about the mining boom up in Karratha, right?
Oh, yeah.
Prices were through the roof, but then the boom ended and
everything plummeted. It could be risky business.
Okay. So, you’re saying it’s not just a guaranteed path to, you know, getting rich quick.
You got it. It’s about understanding those cycles. Doing your research on the specific market you’re looking at, is it set for growth over the long term or is it about to take a nosedive?
Important questions. And that leads us perfectly to myth number three. Houses are always better investments than apartments. This feels like a big one.
Yeah, a lot of people assume that,
right? Like I need my quarter acre block with a house. It’s Australia. But is that always the best strategy?
I mean, it’s not that simple. Houses can be great, don’t get me wrong, but are they inherently better than apartments? Not necessarily.
A rally.
Remember, location, location, location. You could have a massive block of land. Yeah. But if it’s in a low demand area,
Yeah. no one’s knocking down your door to buy it.
Exactly. An apartment, on the other hand, if it’s in the right spot, think of a really trendy suburb, great amenities, close to transport.
That could actually be a better investment than a house in like
You got it.
Location is key.
I’m starting to rethink my entire strategy here. This is good stuff. All right.
Myth number four. Cash flow is king. This one feels right. Isn’t positive cash flow like the holy grail?
It’s important. Don’t get me wrong. Having that positive cash flow, it helps you cover your costs, hang on to that property for the long term, but
it’s not the be all and end all, right? It’s great for managing the investment, but if you want to actually build serious wealth,
there’s something else.
Capital growth. That’s where the magic happens.
Okay, break that down for me. What does that mean, capital growth?
Let’s say you’ve got a property. and the rent covers your mortgage, maybe even puts a little extra cash in your pocket each month. Perfect scenario, right?
Sounds good to me.
Now, imagine in a few years that property doubles in value.
Okay, I like where this is going.
That jump in value, that’s capital growth. That’s how you build real wealth,
right? So, it’s not just about what? Covering costs. You’ve got to have that capital growth working for you, too.
Exactly. Think long term. Okay. Myth number five. This is a big one. Always buy near the CBD.
I mean, it makes sense, right? Close to the action, close to everything.
I get it. I get it. But, you know, remember those future growth indicators we talked about? Yeah. Those are key.
So, we’re talking about infrastructure projects, population growth, all of that.
Exactly. Think about it. A suburb, maybe it’s a bit further out, but it’s getting a brand new train line, a new shopping centre. Suddenly,
It’s a hot property.
Prices go up, rent goes up. You might actually be better off than someone who bought in the CBD 5 years ago.
Interesting. So, you’re saying don’t just look at what’s there now, but what’s coming in the future.
Exactly. Be strategic.
Yeah.
All right. Myth number six. New properties are always better than old properties.
Oo, I can see both sides of this one. Right. That new build smell, nothing beats it.
It’s tempting for sure, but those shiny new appliances often come with a hefty price tag. And don’t even get me started on construction delays.
Oh, tell me about it.
Market could shift before you even get the keys.
True, true. So, what are you saying? Go for the fixer upper instead. Not necessarily, but consider it. Older properties, they can be a good entry point.
But what about depreciation benefits? Don’t you get those with new builds?
Good point. You do get some tax benefits with new builds, depreciation, that kind of thing. But
you got to weigh that up against the potential downsides,
the delays, the market shifts. Right.
Exactly. Plus, there’s something to be said for renovating a place with character, adding value yourself.
Okay, I’m seeing the appeal. All right, next myth up. You can always profit by buying below market value. This one sounds like a no-brainer.
You’d think so, wouldn’t you? Buy low, sell high.
Simple,
right? What’s the catch?
Well, the market is unpredictable.
Let’s say you find a bargain, but it’s at the peak of a property boom.
Uh-oh.
The market cools down. Suddenly, that bargain isn’t such a bargain anymore
because you’ve overpaid.
Exactly.
Wow. Okay. So, how do you know if you’re getting a good deal then?
Look for properties with good bones in a good location with long term growth potential. Don’t get too caught up on that discount.
This is why we do the deep dive. All right, last myth for today. Stick to areas you know.
Oh, familiarity. It’s comforting.
I know. It feels safe. But in investing, is that always the right move?
It can hold you back.
No.
You might be missing out on amazing opportunities just because they’re outside your comfort zone.
So, broaden your horizons a bit.
Exactly. Data, not emotions. Let the numbers guide you.
So, instead of just, I don’t know, sticking to my little corner of the world, I should be looking at the data, seeing what’s out there.
Exactly. You might be surprised at what you find.
This has been eye opening. I gotta say, we’ve covered so much from how to actually get started with property investing to why research is king. What’s like the one big takeaway you hope people walk away with today?
Honestly, don’t rush it. Property investment, it’s a long game. Take the time to really understand the fundamentals, what drives growth in the long term.
So, not just trying to, you know, make a quick buck. Exactly. Think population trends, infrastructure, the economy. Those are your building blocks.
Okay. So, it’s about the bigger picture. Setting yourself up for success down the road.
Precisely. Think of it like training for a marathon, right?
You don’t just rock up on the day and hope for the best.
You’ve got to put in the work.
Exactly. And informed investors, they do their homework. They have a plan.
I feel like I’ve done a crash course in property investing today thanks to you.
Anytime.
We’ve busted those myths wide open, haven’t we? We sure have
and hopefully given our listeners the knowledge to, you know, go out there and make some smart decisions.
Yeah, it’s the goal.
Well, that about wraps up another episode of The Deep Dive. Thanks for joining us, everyone. Until next time, happy investing.
