The first few steps taken by any newbie property investor are crucial for their overall success. Unfortunately, there are some common misconceptions that set them off on the wrong foot.
Adam Hart holds the record for having worked in the most number of positions in Dashdot. He’s been everything—from an analyst to a sales rep to an Acquisition Manager, and now a property portfolio specialist.
But before he came to work with us… Adam lived a completely different life.
See, he was in the hospitality industry. That means he was running restaurants, bars, and nightclubs most weekdays. As well as organising events and festivals most weekends.
You could imagine how big of a shift it was for him to leap straight into the property investing scene from there, no?
Well, it was a huge transition. But Adam decided to go for it when he realised the party scene no longer suited him.
Sure, he loved providing spaces for people to have a great time. But the lifestyle soon took its toll on him. The last straw for him was when he realised just how much waste the events industry created both in terms of energy and physical waste.
Of course, there was also the matter of the pandemic shutting down most events and hospitality venues. It was at that point that Adam thought:
“I need to be in an industry that’s not affected.”
And that’s how he ended up in real estate… And with us at Dashdot.
Despite the fact that Adam came from an entirely different background, he became an invaluable member of the team. Particularly because he brought an outsider’s perspective that made the rest of us realise a lot of important things about the industry.
One of those things is how there are so many misconceptions surrounding property investing. No wonder why many property investors make wrong decisions at the beginning of their journeys!
Adam himself admits to believing most of these misconceptions before he joined the industry and learned better.
The 4 Misconceptions
Here are four of the biggest, most common misconceptions about property investing that could set newbie property investors off in the wrong direction:
Misconception #1: Interest rate is the most important thing
This is one of the biggest misconceptions outsiders have about property investing, particularly when it comes to signing a mortgage.
As a result, many people who are interested in buying property never find the ‘right time’ to do so. They keep waiting and waiting for a better rate to come. And when that number simply goes further up, they lose their will to start investing.
In reality, there are lots of opportunities to build a lucrative portfolio, even in a high-interest rate environment as we have now.
All you have to do to overcome this misconception is to talk to a strategic broker or an organisation that can assist you with the vision of where you’re trying to get to… and a step-by-step process on how to get there—low interest rate or otherwise.
Misconception #2: You must buy a property within a drive of where you live
This is another misconception that Adam himself believed before coming to Dashdot—and he’s not alone. As a result, many interested property investors give up their dream when they can’t find a good location to buy in that’s not far from where they live.
But what Adam eventually learned is that this advice only makes sense to some people who are already in a fantastic area to achieve their goals.
For those who live in a location that’s incredibly out of their reach in terms of buying an investment property, this advice is simply irrelevant.
In fact, it’s a lot better to aim for a balanced portfolio of different asset classes in different areas… Rather than focusing on buying in your area alone.
Misconception #3: Renovation is the only way to add value to a property
One of the first properties Adam bought as a newbie investor is a fixer-upper. As you already know, he doesn’t have a background in professional renovations. He just wanted to get his hands dirty and get a feel for what a renovation feels like.
Adam did get the experience he wanted… But he wasn’t completely happy.
See, by the end of the renovation, he had spent so much money. And it’s money that he could have used to buy a second investment property instead!
So, Adam’s advice?
Just buy the right property at the right location at the right time.
…Unless you’re a pro renovator who could do it faster, cheaper, and better than he did! But even then, there are other ways to add more value to your property and your portfolio without having to spend so much time and resources on a renovation.
Again, it’s just a matter of consulting with the right people on what the best way forward is.
Misconception #4: Property investing is guesswork
For the longest time, Adam thought investing in property is just like gambling. You put in some money, cross your fingers, and hope you win.
But after joining the industry… He learned that he couldn’t be more wrong.
Now, he knows that there are better—and more real—investing strategies than hoping for the best. One such strategy is starting with a portfolio growth plan to get a good insight into how you can achieve what you want to achieve.
After all, there’s no guesswork involved in succeeding as a property investor.
A little bit of luck may get you a lift. But strategising on where you want to invest in, when you want to invest, and how much you want to invest trumps luck any time.
Start Playing Your Cards Right
Now you know just how much myths and misconceptions make up people’s perceptions of real estate investing.
Hopefully, the next time you hear something about properties from someone who has never tried investing… you find the time to question whether it’s true or not.
Who knows? Such misconceptions might be the only things holding you back from achieving the life you want and deserve.