investing in real estate

Overcoming the Fear of Investing in Real Estate

 

I meet people all the time who tell me, “Oh, I would love to start investing in real estate!…but, I’m just too scared.”  Or, “Don’t you get afraid that a deal won’t go through?  Or, “What if you buy a house that’s full of problems?”  Or, “What about dealing with tenants who wreck the place?”  These are all great points.  There is a certain amount of risk that comes with investing in real estate.  But, with all great things, the greater the risk, the greater the return.  Yes, a deal could potentially go south.  And yes, I could buy a house with problems (and I have).  I’ve also had to deal with renters who are a pain.  And yet, I just keep coming back for more.  The reward outweighs the risk for me and I’m not afraid anymore.  So, I want to help you too– here are 5 ways to overcome the fear of investing in real estate and get where you’d like to be.

What are you really afraid of?

When you claim you’re scared to invest in real estate because of some reason or another, what are you really saying?  What’s the deeper fear?  What’s the bottom line for you and once you know what it is, what are you going to do to change it?  Some people are afraid they’ll be embarrassed if they fail.  Others fear losing money.  These are legitimate fears, but if you let these things weigh you down to the point that you won’t invest at all, why are you even doing this?

Assume success will happen

You should always have a plan in case something goes wrong and it’s definitely good to prepare for worst-case scenarios.  However, you should plan and prepare like you are going to win.  Prepare to work with your investors, your broker, your real estate lawyer and others like you’ve already succeeded.  Prepare yourself to give an offer to a seller like he’s already said yes.  Plan a chat with your contractor about things to update that will be quick and easy fixes.  Act like you are successful and you will be, because you believe in yourself.

Knowledge is power

There’s no reason to fear when you understand something.  For instance, if you understand how mortgage types work or how to plan for a kitchen remodel, you will not fear doing those things.  The more knowledge you gain, the less fear you will have.  So, start learning!  Take some courses, read some books and learn all you can about the real estate industry.  If something scares you because you don’t understand it, take the time to educate yourself about it.  

investing in real estate

Do your best to find out if it’s a good deal– and then trust your gut instinct

The biggest fear that real estate investors face is when they are buying a property.  They will ask themselves a million questions like, is it a good deal?  Is it in a good location?  Is the resale value high enough? Does the area have potential for growth?  What will be my return on investment?  What possible problems can I spot right now?…and so many more.  Do your research.  Check out the property.  Add up the numbers and check again and again to see if they make sense.  And then, finally, there will come a point when you just need to trust yourself and jump off the cliff into a freefall and buy the house.  It may come with unforeseen costs, you can’t change that.  But, it’s so much more important to take that leap of faith and trust yourself, than to back out last minute and watch someone else turn a profit. Believe in yourself–you can do this.

Overcome the fear of investing in real estate by maximizing your profit

Finally, as with any business venture, you will want to maximize your profit by taking some time to find quality tenants or to hire a property manager.  If you’re flipping the property, keep things on budget and on track to finish by a set deadline.  If you can sell for more than you spent, you’ll make a profit and your effort was worth it.  If you can’t turn a profit, then you certainly learned some lessons that will help you going forward.  

Gaining confidence in yourself and trusting your instincts is a skill that takes time to master.  In time, you will overcome the fear of investing in real estate if you follow this simple process.  You will start to see a positive return for your efforts and you will feel pleased with both your progress and your determination.  If you want to learn more about investing in real estate and take part of a life-changing investment seminar, sign up today to be a rebel investor with me! 

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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