Real estate has a tendency to scare many away from a great investment opportunity, with financial fears taking control of beginners decisions to even start the process. There are pros and cons to investing, however if you consider the overall investment it can be well worth the upfront costs. By educating yourself on becoming an expert in this industry you will soon overcome the fear of real estate investing and begin earning that cash flow you deserve!
Start by shaking off those constant “what if” fears that typically take control of new investor decisions, making it harder to get ahold of that cash flow. Of course the thought of dealing with bad tenants, coping with negative cash flow or buying at the wrong time are all great concerns, but it’s time to overcome these negative thoughts and begin investing as a professional.
The following fears we address are also great benefits of real estate and why you should reconsider your decision and overcome the fear of real estate investing.
1. Buying at the wrong time – If you have the money to afford this opportunity without putting financial strain on you or your family, then there is no better time to invest than right now! What better way to secure your financial future than having the opportunity right there in your own hands?!
2. Negative Cash Flow – Each month you have a mortgage to pay and operating expenses to consider, as long as the rent you set for tenants exceeds this amount, you should have money left over for a profit (cash flow). However, the fear of a vacant property and unexpected expenses coming up can affect your profit, resulting in negative cash flow.
Overcome the fear by calculating the numbers. Perform a background check on the neighborhood to see the average rent price, selling prices and if there are or has been vacant homes in the area. Ask yourself if there a demand for this location? Is the cost of property low enough to market a decent rent price to enable you cash flow each month? These questions will help get you started on the right location to generate cash flow.
Once your research is complete and you’re ready to rent the property, be sure to include a security deposit for those unexpected expenses and vacancies. One way to determine if the numbers are accurate is by plugging in the mortgage payment and compute the cash flow to ensure that it’s positive at the end of each month.
3. Constant Headaches – Tenants and constant repairs can cause a headache to your life, but if you hire a professional property management team your life will be less stressful. Hiring professionals are well worth the low monthly costs especially if you want to minimize stress, and headaches.
4. No Experience – If we all needed experience in life before starting anything then we all would be in big trouble making it in the real world. The internet is booming with help from YouTube videos offering ‘how to’ videos, income property investment seminars to attend and endless articles to research on real estate investment, all of which can educate your knowledge and expertise in this industry.
5. Deciding Which Property to Invest – Do you have the fear of choosing the right property type to invest? Determine if the best real estate investment opportunity for you is in homes, condos or apartments.
Look at the demand of this market and determine if this area has a good reputation of being profitable or if a demand will soon be in this area. If you’re looking for apartments find buildings near a campus to fill up with college students or if you want condos consider a location near schools for kids to walk to or if you want homes find properties near businesses for those employees to have an easy commute. Determining the right location is a decision that is most important to your investment, be sure to do your research and know the market history and projections to choose the right investment for your money.
Whichever real estate investment you decide to go with, the decision is up to you. There will be challenges along the way, just like any other business opportunity, however once you overcome the fear of real estate investing your options and cash flow will be endless.