It’s no secret that investing in real estate is considered one of the best types of investment. It is projected to be much better than investment instruments such as stocks and bonds. While real estate investment types such as property rentals are more conservative, less risky, they are less profitable. There are also that are riskier, but more rewarding such as house flipping.
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Compared to other investment types, real estate is considered to be one of the easiest, less risky, more long-term, and could earn a huge amount of profit if done right. However, still, there are lots of people who feared to get in touch with real estate investing as the number of investors is showing. There are reasons why the stigma and Morris Invest enumerated the top reasons why these people don’t invest in real estate.
5 Reasons Why People Don’t Invest in Real Estate
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Buying cash flowing assets like real estate is the best way to build your net worth and establish financial freedom for your family. However, not that many people have caught on to the importance of buying assets. From my experience talking to investors, there are five main reasons why:
1. Fear. Many people are unable to begin creating wealth due to fear. They’re scared about money, or the negative things that come with owning rental properties—like evictions or repairs. I’ve done many episodes about fear, and I strongly believe that your ability to change your life lies in your ability to quiet your fears.
2. Cynicism. We’ve all encountered the kinds of people who are skeptical about everything. They think everything is too good to be true. They don’t believe in the possibilities, so they choose to not make it work.
3. Laziness. I have a friend who dreams about reaping the benefits of rental real estate, but he lacks the ability to put a plan into action. He always has excuses, and he just doesn’t have the hunger. If you want to buy assets, you have to go after it and make it happen.
In a nutshell, we can’t blame people who are afraid of real estate investing. They have a strong fear of losing their hard-earned money from investing in something they don’t fully understand. Also, some of them feared to own rental properties for they don’t like the idea of evicting tenants, etc. Some are just lazy to invest, and they’re a hopeless case until they start moving.
While these reasons are valid, there are also lots of ways of combat these reasons or excuses for not investing in real estate. Than Merrill of Fortune Builders wrote the ways to completely get rid of this negativity and start the journey towards real estate investing. Read below to learn more.
Combatting 5 Common Excuses People Use For Not Investing In Real Estate
Every day hundreds, if not thousands, of new investors enter the real estate business. For every one new investor there are probably five that remain on the sidelines. They have the desire to get started and they see the tremendous upside but something is holding them back. Maybe that person is you. From the outside the real estate business can be quite overwhelming. Between the unique jargon and the fierce competition for deals the business is far from easy.
“I’m afraid of losing money”. This is the most common excuse made by would be investors. This is a very natural instinct and a very real concern. Nobody wants to lose years of savings in the matter of months. This narrative is usually shaped from one or two stories they may have heard or read. While there is risk with every investment the reality is that real estate offers the biggest security blanket. When you invest in real estate you are buying a tangible asset.
“I don’t enough education to be an investor”. You will never be completely comfortable with your knowledge base starting out. There is always an area that you are unsure on or would like to know better. You don’t need to be an expert on every aspect of the real estate business. As long as you know a few core areas of due diligence you are ahead of the game. Depending on which aspects of the business you focus on you probably know enough already. Even if you don’t you should have a solid team around you to answer any questions you may have. Every successful investor you see started out in the same position as you. See full post here…
These excuses can be combatted easily if you have the eagerness and determination to learn how to invest in real estate. From the outside looking in, real estate investing is indeed quite overwhelming and complicated. However, don’t let this complexity discouraged you without even trying to learn the basics as well as the advanced concepts of investing in real estate.
It’s time to get unstuck from these unnecessary fears and start investing now, that what Carissa Swanwick wrote in her article at BiggerPockets. Check out what she had written below.
5 Strategies to Get Unstuck and Start Investing Now
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Purchasing your first property is exciting. It can also feel daunting, scary, intimidating, and thrilling.
However, some people struggle to make that first purchase. They spend years reading books, analyzing properties, and feeling that they have to know the answers to every possible situation before jumping in. Meanwhile, others are able to dive right in with less concern about what could go wrong and are willing to learn along the way.
If you are struggling to get off the sidelines, here are five tips to get you unstuck and through your first purchase.
1. Establish realistic expectations
You likely have grand visions of your future portfolio. It will be large, profitable, and produce enough cash flow to change your life and achieve financial independence. Those are great goals that are important to have in the long-run, but they can also feel overwhelmingly paralyzing in the beginning.
Focusing too narrowly on your end goal can make you believe your first purchase will define your overall success. Instead, consider your first property as your “learning property.” Going in with this mindset will help create realistic expectations about the situation.
2. Be honest about what is making you stuck
In reality, there are hundreds of things you must know, but allow yourself the time and space to learn them as they come up. Focus on “just in time” over “just in case” learning.
Rather than pressuring yourself to learn everything, ask yourself, “What is my biggest fear that is holding me back?” By doing this, you can focus on figuring out the correct next step—the most immediate thing you must do to get unstuck.
If your answer to the fear question is, “I’m afraid I will run out of money,” take a hard look at your capital reserves or review your financial assumptions to see if your figures are too optimistic.
3. Right-size your target purchase
Each of us has a unique financial situation that influences how we invest. If you are new to investing and are making a purchase on your own, a 100-unit apartment building may not be your best move out of the gate. However, if you are investing with an experienced partner, you could take on a larger purchase with more complexity.
Select a target property for your first purchase that matches your financial situation and experience level. For example, a single family home is a great property to learn from. Learn more here…
It is normal for people who don’t have the slightest knowledge about real estate investing to be fearful and skeptical about the pros and cons of investing. But it is just temporary. All you have to do is to overcome the fear, emotion, and negativity and start working your way towards learning the basics of real estate investing and later on become a successful investor.
If you’re planning to invest in real estate but lacks the capital, we at Dependable Homebuyers can help you sell your house fast and turn it into capital for you to start your real estate investment project.
There are investments that have the potential to earn huge profits with very high risk such as house flipping. To learn more about selling your house fast, visit us at https://www.dependablehomebuyers.com/sell-your-house/ and we are ready to help you sell your house fast.
