Top 10 Real Estate Investment Myths. And the Truth.

You would have seen them. Social media “property gurus” or random forum threads, proclaiming to have found "secret BOOM locations", bullet proof investment strategies, "free investment advice". Your internal alarms could have sounded. Are they for real? How do these claims stack up in the real world?

As Buyers Advocates in Melbourne, we see what actually happens in the property market, auctions, in finance approvals, during building inspections, and after settlement. We intimately follow through our buyers progress from start till end, and here's what we've found.

In this article, we have complied top 10 real-estate investment myths, and the truth, backed by on-the-ground experience and data.

Myth 1: “Property always doubles every 7–10 years.”

Truth: Long-term property can grow. But growth is lumpy, uneven, and suburb-specific, and property specific.

What actually happens: The type of property, and location matters. Some pockets boom, others flatline or crash in values, and stay that way for years. Timing, supply, location, local amenities, and demographics matter. In Melbourne, school zones, transport amenities / upgrades, and gentrification can shift trajectories. Expect cycles. In most areas, expect prices to rise and fall not straight lines.

Myth 2a: “Negative gearing makes you rich.”

Truth: Negative gearing is a tax treatment, not a wealth strategy.

What actually happens: You’re losing cash flow to (hopefully) gain capital growth. If growth underperforms, you’ve subsidised your own loss. And it can stay that way for years. Without growth, there is absolutely no benefit in negative gearing. To truly benefit from negative gearing, smart investors prioritises good locations and properties over sustainable cash flow. Location and property selection is critical.

Myth 2b: “High yield beats everything.”

Truth: Conversely, yield is only half the story; total return = yield + capital growth - holding costs.

What actually happens: Good yielding (cashflow) properties usually growth at a lower rate. Balance yield for holding costs and growth for equity build.

Myth 3: “You can time the market perfectly.”

Truth: Accurately picking exact tops / bottoms is near impossible. Most people won't know it's top / bottom until the market changes. And unless you are perfectly in tune with the market, you are no different.

What actually happens: Most wins come from time in the market and buying the right asset at a right price. We focus on fundamentals, due diligence, fair value, and quality, then hold it.

Myth 4: “Buy the cheapest suburb. Value is value.”

Truth: Cheap is not the same as undervalued.

What actually happens: Ultra-cheap is often cheap for a reason. It usually means structural issues: oversupply, poor amenities, low socio-economic, high vacancy, or poor build quality. In Melbourne, we go for value, and avoid purely price-led buying and weigh owner-occupier demand, livability, and supply constraints.

Myth 5: “Off-the-plan/new apartments are low risk and always appreciate.”

Truth: Many off-the-plan apartments underperform; some face defects or oversupply.

What actually happens: Stamp duty savings can be outweighed by resale discounts, weak land content, and high owners corporation fees. Apartments are being over-supplied in almost every major Australian city. Investors losing hundreds of thousands of dollars during the first 10-15 years of ownership is common. Do due diligence checks on builder, track record, and owners corp reports.

Myth 6: “Renovate anything and you create instant equity.”

Truth: Renovations generate equity only when scope, cost, target buyer, and resale value align.

What actually happens: Overcapitalisation is common. In Melbourne, kitchens/bathrooms and floor-plan fixes in family suburbs may work; cosmetic flips in oversupplied investor pockets often don’t. Get quotes, and resale evidence before swinging a hammer.

Myth 7: “Buy where you live/know. It is safer.”

Truth: Familiarity ≠ fundamentals.

What actually happens: Your local coffee shop vibe won’t replace hard data: days on market, vacancy rates, income profiles, stock on market, rental demand, school zoning, and planning restrictions, eg, flood/bushfire/heritage. Use facts (data) first; then apply local nuance.

Myth 8: “Auction wins mean you paid market value.”

Truth: To win, you have to pay the top price among bidders that day, not necessarily fair market value.

What actually happens: Campaign strategy, quoting ranges, and emotional bidding can push prices beyond fair value. Our buyers agents appraise the property independently, set walk-away numbers, and stick to them.

Myth 9: “Any buyer’s agent is the same. Just pick the cheapest.”

Truth: Experience, integrity, advice quality, independence, and local execution vary widely.

What actually happens: Melbourne’s micro-markets are nuanced: school catchments, tram/train trade-offs, street-by-street overlays, and builder quality history. New Buyer's Agents entice clients with low fees, and clients pay for the inexperience through poor buying intelligence.

Myth 10: "We can crowdsource the next investment hotspots"

Truth: Every investor and every property is different. What works for one investor, usually would not work for the other. And you risk buying into an overheated location.

What actually happens: Investors usually hype up the locations they had invested in, to manipulate the demand. Demand is a driver for price growth. The risk of buying into an overheated location is high. And crowdsourced opinions almost never match your brief or risk profile and you locations often turn up after the best opportunities are already priced in. This article explains more.

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5 Bonus Myths Debunked

Bonus Myth (1): "There are always 3 secret BOOM Locations"

Truth: There is some truth with this. There are always more than 3 BOOM locations. You just need to know how to find them.

What actually happens: Australia's property market is made up of thousands of micro markets. Each property type, location type, zone, region, suburb, can have its own dynamics. There is always a good location for your budget and goals. You need to identify them. Following the "3 BOOM locations" strategy usually means you are buying developer stocks. Properties which these fake strategists have to sell.

Bonus Myth (2): "Locations nearer to CBD have better growth."

Truth: Locations near CBD is rarely the better performer.

What actually happens: In Melbourne, the best performer is between the 20-30km radius from CBD. And the difference can be significant. Properties in the 20-30km band had performed about 25% better than properties in the inner ring (under 20km).

Bonus Myth (3): "The more expensive the property is, the better it will grow."

Truth: It probably can be true, if you consider the dollar value. However, the best percentage performer is in the first home buyer budget range.

What actually happens: In Melbourne, properties in the first home buyer budget range perform 20-25% better than more expensive properties.

Bonus Myth (4): "Data Don't Lie."

Truth: Data don't lie. That's the truth. But there is more to this..

What actually happens: Most people don't know how to read raw data. You read the narratives that come with the data. And guess what? The narratives are often twisted by the property sales and marketing agents to suit their sales agenda. Always read these marketing spew with a pinch of sale.

Bonus Myth (5): "Buyers Agents Can Buy a Property Remotely."

Truth: Yes they can. In fact, anyone can. You do not need to spend on a Buyers Agent for that capability.

What actually happens: Most Buyers Agents claim to use data. However, data does not show everything an investor need to know to get ahead. An experienced local independent buyers advocate with no sales kickbacks, deep suburb intel, and rigorous due diligence, who can personally inspect the property, can save you multiples of the fee by avoiding lemons and overpaying.

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How smart investors actually stack the odds

Given the property investment scene is filled with so much myth, and that there is no sure win formula, how do investors avoid the pitfalls?

• Define the objective: Capital growth, yield, or a balanced brief—then match asset type and suburb.

• Use a valuation mindset: Comp sets, land value, improvements, and replacement cost.

• Pressure-test cash flow: Interest buffers, rising insurance/rates, realistic rent assumptions.

• Interrogate risk: Build quality, strata health, maintenance, flood/bushfire/overlays, future supply.

• Think demand drivers: Owner-occupier appeal, incomes, infrastructure, schools, lifestyle nodes.

• Avoid hype: “Hotspot lists” and crowdsourced tips often arrive after the move is priced in.

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Quick answers (FAQ snippets)

Q: Do Melbourne properties always go up?

A: No. Growth is cyclical and property-type and even suburb-specific. Buy quality and hold through cycles.

Q: Melbourne properties go through a 18 year cycle.

There is NO 18-year clock. The 18 year clock might be true for some states at a top aggregated level, but we invest at the property level. The 18 year clock is good marketing spew, but suburbs and property types often do not cycle with a 18-year clock. Some cycles are shorter, some longer.

Q: Is negative gearing a strategy?

A: No. It’s a tax treatment, and often mis-used by project marketing and sales agents to sell overpriced underperforming properties. Focus on asset quality, not tax offsets.

Q: Should I chase the highest yield?

A: Yes, but not blindly. It needs to fit your investment goals. Balance yield with growth drivers for total return.

Q: Off-the-plan or established?

A: Established, land-rich, scarce assets typically have better long-term growth. You need to verify case by case.

Q: Renovate for instant profit?

A: Only happens in social media. You need to work through the scope, cost, and buyer demand. Otherwise you risk overcapitalising. Majority of the profits are around $50,000, after purchasing costs, selling costs, taxes, renovation and holding costs, for about 6-12 months' work, if you get it right. Many don't. Consider if this is worth your effort.

Q: Can I time the bottom?

A: Rarely. Do you have a crystal ball? Relying on data? Trends only shows on data AFTER 6-12 months. IE, you would have missed the bottom by 6-12 months. No-one can get the bottom right, but if you are on the ground every week, you will be able to spot trends before it shows up on data. Prioritise fair value, quality assets, and let time do the rest.

Red flags we see in Melbourne due diligence

There are however some certainty with redflags such as:

• Owners corporation (body corporate) stress: Low sinking funds, special levies looming, water ingress/defect history.

• Overlays & planning: Flood/bushfire, heritage, planning zone nuances, set-back and subdivision limits.

• Rental risk: Unrealistic advertised yields, short-term rent holidays, or landlord-unfriendly floor plans.

• Maintenance traps: Asbestos, illegal works, termite history, or major structural movement.

• Street/position factors: Backing major roads, railway noise, or problematic neighbouring uses.

A smarter blueprint for property investors in 2026

1. Clarify your brief (growth vs yield, budget, time horizon, risk).

2. Screen suburbs with data (DOM, vacancy, income growth, stock pipeline).

3. Shortlist property types with owner-occupier appeal and scarcity (family homes, quality townhouses, select boutique apartments).

4. Run cash-flow scenarios at higher rates and with conservative rents.

5. Do the boring work: building & pest, strata review, contract conditions, zoning checks.

6. Negotiate or bid with discipline. Anchored to evidence, not emotions.

Final word

Property investing isn’t about clever loopholes or magical “doubling” formulas. Neither is it copying what your friend did. It’s about buying the right asset, at the right price, with the right risk controls. Then let time and demand do the heavy lifting work for you.

If you’d like a second set of eyes on your shortlist, or want us to find, assess, and negotiate the right property for you, Concierge Buyers Advocates can help. We’re an independent Melbourne buyers advocate with fixed-fee services for hands-on and full-service investors.

Next step: Send us 2–3 addresses you’re considering (or your brief and budget), and we’ll show you what’s myth… and what’s real.