Like anything else, real estate has its share of myths. These myths usually arise due to greed or because of the bragging rights of people who have achieved some success with property, in the property investment market. They always involve stories of enormous fortunes made through property.

Another myth is if you don’t buy now you will miss out because the prices will never be cheaper. Markets go up and down according to the cycle. At certain times prices will be lower, depending on the timing as per the investment clock. Real estate prices do not always rise. In many cases real estate values go down.
There is a standard saying that if there is a chance of a capital gain in property then there is also the chance of a capital loss.

Wherever you decide to invest you need to research certain aspects of that particular market,
such as:

• What Industries support the region? ie is it a one horse town?
• What are the market values for the different types of properties in the different parts of the
• region? Learn the values one suburb at a time.
• What are the good streets & what are the bad streets? Know what makes them good and bad
• so you can watch for changing factors over time.
• What are rental returns for the different types of properties in the different suburbs?
• What are the capitalisation rates for the different types of properties in the different suburbs?
• What is the tenant pool for the area, and what sort of properties are they looking for?
• Build a relationship with your key team members, particularly Valuers and Real Estate Agents.

Like anything else, real estate has its share of myths. These myths usually arise due to greed or because of the bragging rights of people who have achieved some success with property, in the property investment market. They always involve stories of enormous fortunes made through property.
Perhaps the biggest myth is that you cannot lose in real estate. This is not correct as you all know. There are plenty of people that have bought into real estate when the market was at the top and because of economic conditions or a downturn, or even the influence of difficult times in the US or other overseas countries, they find themselves in a situation where the demand dries up and they are forced to sell at a “fire sale” price just to get the return of their invested capital.
Many people of course have made fortunes from following some of these myths, but the truth is, probably a lot of people have lost in real estate (mainly the small, new investors with little knowledge of property) than have made fortunes. The myth that real estate always rises in price and that the returns are therefore guaranteed in some way is incorrect.

Before starting to contact agents and search the papers etc, it is critical to know what you are looking for, and to have your rules defined. Ask yourself ???? What am I looking for?

• Cash flow property or a capital growth property.

• What type of property? 3 bedroom house, block of flats, value add property, development off the plans, multiple income property.

• What area do I want to be purchasing in? ie Which location ???? specifically.

• What type of tenants am I after? Students, executives, professionals.

Having answers to these questions gives you the clarity and therefore you will not spend your precious time looking for properties that do not meet your criteria.