Real Estate Investment: Myths and Facts

Everyone wants to invest in real estate, but not everyone is fully aware of the risks and benefits involved; many myths surround real estate investment, whether it’s in Calicut or elsewhere. Let’s take a look at some of the commonly believed myths.

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  • Myth: Developers deliberately delay projects.

Fact: It is in the developer’s interest to complete and deliver a project on time, because delays in completion means increased cost of labour and materials, and overheads as well. It also means loss of income – they won’t get full payment until they hand over the completed apartments to the buyers. They also delay starting their next project. So a developer will never delay a project on purpose.

  • Myth: To sell your property, always demand a higher price at first and then negotiate down.
    Fact: Your pricing strategy should mimic the trends in the local market. This tactic may not always work everywhere. It’s a misconception. You may try this tactic if there is high demand and not many flats available for sale in Calicut.
  • Myth: Property value doubles every 10 years.

Fact: This is one of the oldest myths around. Real estate market is volatile and unpredictable. It’s quite possible that you may face a loss when you sell – depending on the socio-economic conditions, and your own situation. If you want to sell your Calicut property, sell when you get a good price, rather than wait for 10 years for it to ‘double’.

  • Myth: Real Estate Investment is too risky; better look for other options.
    Fact: No investment that earns you substantial benefits is free of risk: the share market, gold bullion, bonds – all these are subject to market risks, and real estate is no different. In fact, real estate is more stable compared to the stock market; so if you’re a low risk taker, you should definitely invest in property.
  • Myth: Developers want prices of property to keep on increasing.
    Fact: If developers sell apartments or villas they construct at unreasonably high prices, they will also have to pay such prices to acquire land for their next project. For this reason, they will not want unnatural price rise for real estate.
  • Myth: You should decide to purchase based on the prevailing market condition.
    Fact: You should enter the market when you can afford it – that is more vital. What is the point if market conditions are favourable, but you are facing a cash crunch? It does not make much sense, does it? If you have the funds to invest, then you can consider market conditions as an additional factor. Of course, you also need to consider the reason why you are purchasing property– is it purely for investment, or do you want to actually move into it?

If you’re looking to purchase an apartment in Calicut, check out the latest completed and ongoing projects by HiLite Builders, one of Kerala’s most reputed developers: http://www.hilitebuilders.com/properties/

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