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3 Ways To Overcome the Fear of Buying Your First Investment Property

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.

1

THE WORST-CASE SCENARIO

Often when you are considering purchasing an investment property for the first time, all you can image is everything going wrong, your property will sit empty, the repairs will cost too much, your renters will damage your property, and you will lose money. To deal with this fear, take the time to consider what the worse outcome can possibly be, and then sit down to determine if you can live with it. Often times, you will find that you can.

2

YOU DON'T KNOW ENOUGH ABOUT
REAL ESTATE INVESTMENT

You may worry that you don't understand the market well enough to make a solid decision. This lack of confidence can keep you on the sidelines. There is an easy fix, however. First, start reading all the books you can find on investing in real estate, property management, and home repair. Second, join your local real estate club and start asking questions. People are usually happy to help.

3

THE DEBT IS BAD - MINDSET

For many people the idea of holding debt has a negative association, and while it is true that some types of debt can be burdensome, not all debt is created equally. When you are taking on debt that you can then pay off with someone else's money, such as your tenants, then this debt classification can lead to a positive outcome. In addition, real estate debt can help reduce your taxes, so what you see as debt actually becomes an asset. In the end, your tenants will pay for your investment property, and you will, over time, accumulate debt free properties that can provide you a substantial monthly and yearly income.

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.