For many first-time investors, the prospect of actually putting your money on the line and taking action by buying a property is terrifying.
It’s completely understandable – when you’re handing over your hard-earned savings and getting a loan for several hundred thousand dollars, you want to feel confident that you’re investing the right way.
But many would-be landlords let their fears trick them into delaying their first move – to the point where they fail to become investors at all.
Here are 3 common fears plus some strategies to overcome them:
1. I’m scared of investing in the wrong property
You’re not wrong!
This is a very real risk and it’s mistake that many inexperienced investors make.
But there is a proven strategy you can use to mitigate this risk: research.
Solution: There is no substitute for doing your diligence.
This is what allows you to buy an investment grade property in a quality area where rental demand is high, vacancy rates are low and capital growth is on the agenda.
2. I’m worried I won’t be able to find a tenant
Or worse, as one new investor once asked me, “What if the tenant trashes the place? I just don’t know how to get comfortable with the idea of a stranger living in my property.”
Adjusting your mindset is so crucial as an investor; you need to remove emotion from the equation and get your head around the fact that it is not your home, but is in fact a business opportunity to derive profits.
Solution: Referring back to point one, if you buy well in a strong rental area, finding a tenant shouldn’t be a problem – and having a good property manager on board along with landlords insurance will help protect you financially against tenant damage or loss of rent.
3. The idea of taking on a huge mortgage terrifies me…
It’s natural, and actually quite prudent, for you to consider how you’ll be able to meet your investment mortgage payments.
Again, this comes back to having the right mindset that allows you to see income-producing debt as a positive thing, rather than a financial noose around to neck.
Solution: To achieve this, you need to get your finances in order before you start investing, to ensure that your budget can handle the responsibility of a new mortgage.
You should also aim to have some cash set aside to cover you for unexpected circumstances.
You may notice a common theme in this list… scared, worried, terrified… All of these issues are based around ‘fear’.
We’ve all heard the horror stories about people who have lost money on property, but keep in mind that for every negative story you hear there are just as many positive tales.
Remember that over the long term, property is a fairly forgiving asset class; I have known investors who’ve made plenty of mistakes and bought in terrible locations, but they’ve still made money at the end of the day.
The most powerful way to combat fear is to educate yourself so you can invest with confidence and peace of mind, safe in the knowledge that you’ve done everything within your power to buy like a smart property investor.
If you’re still not able to move past your fears and invest with confidence, then consider engaging an experienced property professional to guide you forward.
If you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.
Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.
Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.
Please click here to organise a time for a chat. Or call us on 1300 20 30 30.
When you attend our offices in Melbourne, Sydney or Brisbane you will receive a free copy of my latest 2 x DVD program Building Wealth through Property Investment in the new Economy valued at $49.