Conquering the Fear of Investing

Posted on June 8, 2016 by

Perhaps you’re a new real estate investor who has thought about using real estate comps to dive into real estate investing but have been hesitant due to a feeling that the market will collapse once you get in and you will lose all your money.  Well rest assured; you are not alone.

Fear touches every new investor; and no one successfully investing in real estate today would tell you otherwise. So let’s address some of the most common fears and see whether we can help calm you and urge you to take the plunge into real estate investing.

Having to feed a property won’t cut it; no investor wants to feed a rental property.  Believe it or not, this fear might be the easiest to manage because it’s straightforward: simply run the numbers before you buy, using real estate comps makes this a breeze. Obtain the property’s last twelve months income and operating expenses, calculate a mortgage payment, and plug the results into a spreadsheet or real estate investment software program to determine cash flow. If the cash flow is negative, weigh the deal and decide.  If the numbers work then, move forward.  

Remember, you never walk away merely because the property indicates a negative cash flow. Dig a little deeper and look for ways to manage the cash flow. Many rental income properties simply go negative because of poor property management; you might have a probability of raising the rent and cutting operating expenses.  Sometimes we think…this isn’t the right time…But real estate investment has little to do with the economic climate at the time you buy. You must consider the long haul. Economic depressions come and go, but how will the investment property impact your future rate of return? That’s what matters.  If it helps, bear in mind that unlike the ups and downs of the stock market, real estate has a record for steady appreciation.

Of course I know, you wouldn’t want to tap into your savings to make maybe the largest financial investment of your life only to end up on the losing end. The key, however, is to study and research. Learn about the property you want to invest in, and the area where you plan to invest. Look for sources of information like REIA comps to get the comps and support you need to make an offer. We know that there’s always some risk involved when real estate investing, but developing a plan with knowledge will help eliminate your concerns.  Just because you have not gotten your feet wet in investment properties, should not keep you from real estate investing. In this case, locate a real estate agent who specializes in investment property to assist you.

Given, the hardest part about starting real estate investing is getting started. We want to be cautious. It’s better to put the brakes on and approach real estate with adequate knowledge. My suggestion to you is: learn, research, and plan. Educate yourself about real estate investing, learn about real estate in general and the niche you want to move into. REIAComps is here to assist you every step of the way.

Mark JacksonMark Jackson is an appraiser, real estate investor and property valuation specialist who teaches others to get more out of their real estate investing business. In 1999, Mark founded an appraisal company and soon found his true gift was analyzing property values for real estate investors. Since 2000, has closed millions of dollars’ worth of his own domestic and international real estate transactions. Mark’s passions are: faith, family, golf and real estate.

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