By Brett Warren September 21, 2024

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6 “fears” that trick us into not investing

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6 “fears” that trick us into not investing

Key takeaways

Investing in property is a proven way for Australians to build their financial nest egg, but if you're apprehensive about taking the leap and borrowing six figures to invest in property, you're not alone. Here are six of the most common fears that trick people into not investing.

Fear of being swindled is normal, but healthy skepticism can help you avoid making a poor choice. Trust your instincts and don't let your fear of losing money prevent you from investing at all.

Investing can seem overwhelming, but if you approach it with an open mind, anyone can understand it. You don't need to understand every single aspect of it to make an effective choice, and you can enlist the help of a professional to make the process easier.

Investing involves numbers and lots of them. If maths isn't your strong point, don't worry, you can always work with trusted accountants and advisors to guide you along the way.

Investing in property means taking a risk that you could lose money, but you can combat this risk by choosing an investment-grade property in a location that is likely to outperform the averages because of its local demographics.

In order to make the right choice among so many options, you need to do your 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 there.

Investing in property is a proven way for Australians to build their financial nest egg.

But if you’re apprehensive at the thought of taking that leap and borrowing six figures (or more) to invest in property, you’re not alone.

Here are six of the most common fears that trick people into not investing:

Failure

1. Fear of failure

If you don’t have previous experience, it’s easy to feel like investing is something you’ll never be able to achieve, and it’s true it can invite some potential disasters.

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 are enough to deter even the savviest of would-be landlords.

But by having a "rainy day" financial buffer, researching your properly carefully before you decide, and by getting a team of independent and unbiased advisers around you, you’ll minimise the risks for potential failure – and maximise your chances of success.

2. Fear of being swindled

The property market can be rife with mixed information, which makes it easy to feel 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...well enough said!

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.

But don’t let your fear of losing money prevent you from investing at all – because if you don’t buy any assets, you’ll never grow your wealth.

3. Fear of being inexperienced or unintelligent

Investing can seem so overwhelming that it might feel easier to avoid it together.

But the truth is, if you approach it with an open mind, anyone can understand it.

There are many sources, from books and magazines to online blogs, which can help you to build your knowledge before investing.

What’s more, you don’t need to understand every single aspect of it to make an effective choice.

And if it’s still too much, you can enlist the help of a professional, like a property strategist, to make the process easier and give you the best chance of choosing a quality properly and making wise investment decisions.

In fact, to secure your financial future in today's "interesting" environment, you’ll need much more than just a property strategist or a buyer’s agent.

The team at Metropole offers a 360° complete approach to ensure you Grow, Protect and Pass On your wealth.

We customise a solution to meet your specific needs using time-tested frameworks for acquiring wealth and help beginning investors buy their first property, experienced investors add to their portfolio and sophisticated investors manufacture capital growth by becoming property developers.

4. Fear of fudging the numbers

Investing involves numbers and lots of them.

If maths isn’t your strong point, you might shudder to think that in order to invest properly in property, you must have at least a basic idea of mathematics.

You need to be able to estimate a property’s potential cash flow by calculating aspects such as the expected rental income, necessary repairs and maintenance, insurance, taxes, and payment for any expert advice you’ve received along the way.

But never fear: if all of this falls into your ‘too-hard basket’, you can always work with trusted accountants and advisors to guide you on your way.

5. Fear of going broke

Put simply, investing in property means taking a risk that you could lose money.

It’s a fact, and the outcome of your investment cannot be predicted with complete accuracy.

Suburbs 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.

The risk of losing money is an unavoidable reality of investing, but it is a low-risk and one you can combat by choosing your investment wisely and buying an investment-grade property in a location that is likely to outperform the averages because of its local demographics.

6. Fear of making the wrong choice

No one wants to part with a large amount of money to end up with a poor result, which is exactly what can happen if the property isn’t chosen carefully.

So how do you make the right choice among so many options?

Do your 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.

While most inexperienced investors start by looking for a property and then doing their research backward from there, strategic investors look for the right location first.

They recognise that the location of their property

The ability to work, live, and play all within 20 minutes’ reach is the new gold standard for urban planning.

Imagine being able to carry out your daily activities within a 20-minute walk from home.

All the things you need in a day would be just a short walk away.

In planning circles, it’s a concept known as the 20-minute neighbourhood, and it could be on the cards for your area sooner than you think.

And it’s likely that in our new “Covid Normal” world, people will love the thought that most of the things needed for a good life could be within a 20-minute public transport trip, bike ride or walk from home.

Things such as shopping, business services, education, community facilities, recreational and sporting resources, and some jobs.

Ultimately, we all face similar fears when it comes to investing in property – and in fact, it would be unusual if we didn’t have fears of some sort.

The key to moving past your fears is to do what you can to mitigate them, so they don’t stand in your way and prevent you from building your wealth through property.

About Brett Warren Brett Warren is National Director of Metropole Properties and uses his two decades of property investment experience to advise clients how to grow, protect and pass on their wealth through strategic property advice.