Conquering your fears is the only way to move forward in life – and when it comes to property investing, there are plenty of fears you may need to overcome.
Real estate expert Tanja Kraus, author of Maximum Returns, Minimum Concerns, A Guide to Successful Property Investment, says it’s perfectly natural to be fearful about spending hundreds of thousands of dollars on a piece property.
“At the very basic level, when we were hunting for food, if we didn’t conquer our fear of predators and go out and hunt – we died,” she says simply. “Fast forward a few thousand odd years and the consequences may not be as dire, but our fears are still relevant.”
When it comes to property investing, keeping your fears in check is vital in order to ensure you don’t make snaps decisions that could impact your financial future.
So, here are Kraus’ top tips for conquering your fears, to help you create a better, financially freer lifestyle through property investment.
Fear fighter # 1: Knowledge
The more knowledge we have of something, the less afraid of it we will be. Find out as much information as you can about your potential investment: what is the return? What has the growth been in the area? Where are the roads going to be? “Take the time to go the extra mile,” Kraus says, “and find out more than what the agent is telling you.”
Fear fighter # 2: Preparation
It’s simple: the more prepared we are for a situation, the better we are able to handle it. “If you’re heading into the property field, be prepared by getting educated,” Kraus says. “Know what your rights and responsibilities are as a landlord, as knowing what you can and can not do can go a long way towards putting your mind at ease if you have any concerns.”
Fear fighter # 3: Know your worse case scenario
In the investment property game there can be a minefield of “worst case scenarios”. By knowing what they are and what you are able to handle, you can eliminate your fear of your worst case scenario coming to fruition. “For instance, if your property is vacant for six weeks, can you afford to pay the mortgage while it’s not earning any income?” Kraus asks. “If your property burns down, are you adequately insured? If your tenant doesn’t pay rent, and doesn’t move out, do you have tenant insurance and an experienced property manager to take you through to the end of this dilemma?”
Fear fighter # 4: Use professionals
A great way to reduce the risks involved in property investing is to use professionals! “Sure, it may cost you 8% or 9% to use a property manager in a residential property situation – but how much more will it cost if you try and manage the property yourself? What are the chances that you may do something wrong?” Kraus says. “Using professionals may be a short term cost, but it is a long term investment.” Conveyancers, solicitors, professional property management services and accountants all can and will save and make you money in the long run.
Fear fighter # 5: Experience
Finally, experience goes a long way in conquering our fears. “The longer you’re involved in the investment game, the easier it gets to make educated decisions,” Kraus says. “While you are inexperienced, draw from those with experience: read books, surf the net, get on email lists for landlords or investors. The more you know, the more you know.”