It’s one of the few industries which appeal to both the savvy investor, and the Average Joe. This in itself is exactly what makes the real estate industry so interesting.
However, with interest comes added reporting. And, with added reporting, comes more inaccuracies. This is something that has happened in abundance with the real estate industry, and one only has to open the newspaper on most days to spot at least one myth which is blighting it.
It’s for this reason that we tapped into the knowledge of Gene Bernshtam; a person who has plenty of experience in this field of work. We asked what the biggest myths surrounding real estate currently are, and were met by the following.
“The market is only going to get better”
Hopefully, the last few years should prove that this is by no means guaranteed to happen. For years the real estate agency spoiled us somewhat; it was constantly on the rise and few of us knew anything different. Now, things have changed.
Recessions do happen, and they have happened recently. Not only that, but they will happen again. Sure, the market seems quite steady for the time being, but if you are investing with the belief that the market is only going to go in one direction you might be dealt some dangerous realities later down the line.
“Every renovation results in payback”
This is one of the scariest myths out there, for the simple reason that so many average homebuyers jump straight into it. Many believe that any work they perform on their property is going to result in a huge rise in value. Well, sadly this doesn’t always happen.
Renovations are not equal. Some will usually add value to a property, while others won’t make the slightest bit of difference. For example, a new bedroom might help immensely, but when it comes to a renovated bathroom some studies have shown that you will just reap around 70% of your investment back.
To add extra confusion to the equation, some regions will put a ceiling on the value of your home. If you live on a street where every home is approximately $200,000, its unlikely millionaires are going to be on the lookout in that particular area and that is somewhat limiting.
“You will save money by selling yourself”
It might sound tempting to eradicate a real estate agent’s fees, but we would exercise caution before following such an approach. While it’s true you will make that instant saving, in the long-term it might work against you.
After all, these agents are experienced in the business. They know the market, and they also know how to handle a sale. This last part is often forgotten about and you should remember that your time is worth something as well – and you will spend more time dealing with administration if you opt to take the real estate agent out of the picture.