When it comes to real estate investing, a little fear can be a good thing. Fear keeps you from making a bad decision or acting too quickly before you have all the facts, but too much fear can cause you to freeze up and not act at all, and that will get you nowhere. If you are consumed with fear about buying your first investment property, there are three ways to overcome it and it all starts with a little knowledge.
According to the National Association of Realtors Commercial Real Estate Lending Trends 2016 report, the outlook for investing is positive. Vacancy rates are on the decline for commercial business properties and rents are on the rise and should increase by 2.5 to 4.0 percent in the next year. In addition, lending conditions have improved over 2015. All of this points to now being a good time to take the plunge into your first investment property, but before you do that you will need to deal with your fears.
Prior to attempting to overcome your fear, you should take the time to understand what you are truly afraid of. Fear is simply a way for our brains to tell us there is danger ahead. What you need to decide is if the danger is real, or if it is only a perceived danger. By admitting to yourself that you are afraid, you can then determine if the fear is justified or if it is not truly based on the facts.
Once you understand your fear, and acknowledge it, moving past it and acting are much easier. Three of the top fears that keep people from making their first investment real estate deal are as follows.
Real estate investing can be scary. This is doubly true for the first time buyer, but you can't allow fear to stand in the way of your financial goals. As long as you do your homework upfront, you will not be taking a leap of faith. Instead, you will be making a wise and well thought out business decision, but if you are having difficulty making the jump just remember that you are in control.
By understanding the worst-case scenario and knowing you can handle it, increasing your real estate and property management knowledge, and realizing the difference between good and bad debt, you can face your fears and move past them. The rewards waiting for you on the other side can be great, so conquer your fears today and get that first real estate investment property under your belt. You will be glad that you did.