Investing in property is one of the many ways that can help us to be financially free. It is what the smart and rich people do it all the time, however, it does carry fear for many people. This is understandable given the large sums of money involved, it is a big purchase!
Here are six of the most common fears that trick people into not investing:
FEAR OF FAILURE
If you don’t have experience, it’s easy to feel like property investing is something you’ll never be able to achieve
Loss in property value, inability to keep up with maintenance, the prospect of terrible tenants, and all the stress that comes with owning a property is enough to deter any of us. The media also helps fuel this fear with stories popping up weakly with horror stories of investing.
- Setting up a “rainy day” financial buffer
- Researching your purchase carefully
- Surrounding yourself with a team of independent and unbiased advisers
FEAR OF BEING SWINDLED
There is so much information available about property markets that it is easy to get lost in what is correct and what is not. This information can make the would-be investor distrustful of those who “appear” to be there to help. Many so-called “advisers” have a vested interest, while real estate agents represent the vendor and project marketers are there to make money for the developer. Healthy skepticism can actually be valuable because it allows you to think twice before diving into what could potentially be a poor choice.
- Trust your instincts, and if it doesn’t feel right, don’t do it.
- Read and subscribe to trusted property experts
- Employ the services of a qualified buyers agent
FEAR OF BEING INEXPERIENCED OR UNINTELLIGENT
Investing can seem so overwhelming that sometimes it’s just easier to avoid it all together. They worry they don’t have the experience or the knowledge to purchase a property. People also fear what other people think of them and that investing in property is risky.
- There are many sources, from books and magazines to online blogs, which can help you to build your knowledge before investing. You don’t need to understand every single aspect of it to make an effective choice.
- Read, listen and watch from those who have successfully invested in property
- Employ a professional to help you. They can make the process easier and give you the best chance of choosing quality properly and making wise investment decisions.
FEAR OF FUDGING THE NUMBERS
Investing involves numbers and keeping track of these numbers is a vital part of property investing. You need to be able to estimate a property’s potential cash, expected rental income, necessary repairs and maintenance, insurance, taxes, and payment for any expert advice you’ve received along the way.
- Work with trusted accountants and advisors.
- Learn to use spreadsheets.
FEAR OF GOING BROKE
Investing in property means taking a risk that you could lose money and the outcome of your investment cannot be predicted with complete accuracy. Suburbs/towns/cities rise and fall in popularity; future developments in the area can make a property less desirable to tenants; a property can decline in value due to a number of reasons, and the economy is forever fluctuating.
- Choosing your investment wisely,
- Buy investment grade property in a location that is likely to outperform the averages.
- Seek the help of a professional
FEAR OF MAKING THE WRONG CHOICE
There is nothing worse than parting with a large amount of money to end up with a poor result. This is what can happen if the property isn’t chosen carefully.
- Research beforehand to gauge what types of properties are likely to be in continuous strong demand in the future by a wide demographic who can afford to and will be prepared to pay a premium to live in that area.
- Choose properties that have positive lifestyle factors such as close to CBD, parks, schools, shopping centers, and public transport.
- Talk with experts, real estate agents local council, buyers agents