Think you know everything about real estate? Guess again! When it comes to property, everyone has an opinion and the conversations never end at family gatherings or dinner parties. With so many bold claims, savvy tips, and “proven” rules floating around, it’s alarming how many myths still trick even the most confident buyers. Let’s pull back the curtain on ten of the most persistent real estate misconceptions, as revealed by the ever-evolving market.
1. Buying is Always Better Than Renting
Some swear that only fools rent, but reality is nuanced. Whether buying is “better” depends on the balance between your purchasing power and your rental prospects in the chosen city. In high-priced places, like Paris, renting might give you access to better, larger homes than you could ever afford to buy, as Ludivine Guillot, a real estate advisor, confirms. It also hinges on your plans: staying put or likely to move soon? If you foresee relocating, postponing a purchase can help you avoid hefty notary fees twice and save on inevitable property-related charges like local property taxes.
2. Maxing Out Your Mortgage Is Always Smart
Should you borrow as much as possible, or slap down a hefty deposit? The answer: it depends on interest rates. In low-rate times, borrowing more and investing extra funds can make sense. Guillot warns that you should always keep a financial safety cushion for life’s surprises—think repairs, a new baby, marriage, even separation or loss. Flexibility matters; don’t lock up all your savings just to secure bricks and mortar.
3. Wait Long Enough, It’ll Always Sell for More
If a property stays on the market for ages, it often ends up selling for less—a cold truth many ignore. Besides depreciation, unsold homes mean extra owner costs like taxes and shared building expenses. Having a professional involved—even with their fees—frequently speeds up a sale, especially in less dynamic markets. Agents can tap into a database of potential buyers, ramp up advertising, qualify buyers financially, and negotiate effectively, all to increase your chances of a successful sale.
4. You Must Buy Your Primary Home Before Investing
Guillot’s take is clear: “It’s easier to invest before buying your main residence!” Why? Because buying your own home typically stretches your borrowing power to the limit, locking you out of further purchases. Investing early means rental income is added to your salary—usually 80% of rent counts as income when banks assess you. Just make sure the rent covers all costs, loan included. You can even invest outside your own town, which is a lifesaver in sky-high price areas, but stick to markets you understand and be mindful of the headaches distance can cause. For far-away rentals, professional property management might just save your sanity.
5. Renovating Before Selling Always Pays Off
For some buyers, visualizing potential is tough. Home-staging can help, but don’t overdo it on costs. Guillot always asks her clients: Will your planned renovations boost the home’s value, help it sell faster or broaden its appeal? Sometimes, showing quotes for big upgrades works better than doing the work yourself—especially for energy improvements. You can then adjust the price accordingly, and skip unnecessary stress.
6. Auctions Guarantee a Bargain
Property auctions can offer more opportunities, since starting prices generally sit below market value. But, beware the adrenaline rush: getting carried away might lead you to overpay. All auctions come with strict rules and while bargains are possible, they aren’t a guaranteed jackpot.
7. Real Estate Values Only Go Up
Wishful thinking alert! The day you buy, there’s no crystal ball showing whether you’ll profit down the line. Price trends rely on countless factors: economic climate, interest rates, market supply and demand, environmental changes, and the property’s condition. New buildings or urban development around you might push up (or drag down) your resale value. And if you bought an “old timer” twenty years ago, it might not match most buyers’ expectations today, especially against new homes with perks like balconies or parking.
8. Real Estate Investment is Risk-Free
Nope. Every investment carries risk. Buying at fair market value and knowing your objective—be it building wealth, maximizing yield, or finding tax benefits—is vital. Each strategy needs a tailored approach. As a landlord, remember to factor in all routine and unexpected costs: bad tenants, vacancies, surprise repairs, and keep a cash buffer ready for life’s curveballs.
9. Tax Incentives Mean Easy Gains
Sure, France has a whole alphabet of property tax schemes (Pinel, Malraux, Denormandie, LMNP, and more). Each has its perks and pitfalls, and Guillot warns buyers to weigh them carefully. For example, Pinel law means buying new, but such properties typically lose value, and reselling at purchase price is rare. Binding terms apply: minimum rental period (6, 9, or 12 years), rent limits, and restricted exit options. Selling before term wipes out any tax advantage.
10. There’s a Perfect Time to Buy
Looking for the magic moment? Spoiler: there isn’t one. Markets swing up and down, but waiting forever usually means missing out. If you sell when prices dip, you’ll also buy at a lower price. The perfect time is whenever you’re ready—Guillot recommends investing as early as possible: “The sooner you invest, the sooner you benefit.”
Conclusion:
- Real estate is packed with persistent myths. The market changes, and yesterday’s tips can easily become tomorrow’s pitfalls.
- Do your homework, keep some flexibility, and remember: property is as much about wisely navigating complexity as it is about square meters and interest rates.
- Stay curious and trust facts—your future self (and wallet) will thank you!
