Fear is the biggest obstacle that holds people back from building and achieving their dreams.
It stops us from shaping the life that we want and leaves us wondering “I wonder where I’d be if I did … back then?”
It paralyses us and bounds us to decisions and actions that are familiar, comfortable.
When it comes to wealth creation, fear is the very emotion that stops many first (even second) time buyers from taking that next step in investing in property and their future. It leaves people asking themselves, their significant others, families and friends…
“Is now the right time? Maybe I should give myself more time to let the thought settle…”
“Is this the right property or investment?”
“Should I look at more properties?”
“Should I wait to see what else will be available in the market?
“What if the investment doesn’t perform well and I’m taking on more than I can afford?”
“Whose advice should I take?”
While some people let fear take over for a period of weeks or months, some allow it take control over their lifetime. This past year, we’ve seen some of our client investments go up by $50k over 6 to 8 months – imagine how much you’d missed out on over a lifetime if you surrendered to your fear.
This is why we see and will continue to see a lot of middle-class Australians retiring below the property line.
Why do we fear?
Fear is an integral part of our lives and its important to understand why we fear. It starts from starts from the amygdala, which is part of the limbic system. It is the oldest part of the brain and does not involve a lot of conscious thought. Instead, it is instinctive and reactive. Fear is the ancient ‘fight or flight’ mechanism that protected us millions of years ago as we hunched in front of our caves (learn more about the science of fear here).
But we are not cavemen and women. While we can’t rewire our instincts,, we need to understand why and when we fear, when it’s logical and at what point we need to weigh the risk and benefits of going against the grain of this emotion.
How to address your top three fears in property investment
We’ve been there before ourselves and we’ve worked with hundreds of clients who’s had that little voice in their heads or gut feeling that they shouldn’t invest “just yet”.
Over the years, we’ve uncovered the three most common fears stopping people from taking the next step in their property investment journey and how to logically think through them.
1. Choosing the wrong property
Is it the right one and the right time to invest? Will there be better performance elsewhere? These are the questions we have been asked many times. We know that property investment is a big financial and life decision. That is why it is important to do the due diligence, the research and surround yourself with experts who can assist you in finding the right property for YOU. While you can wait for “hopefully something better”, delaying the investment decision itself, can be more costly than waiting for the better performances.
2. No tenant!
Rental vacancy is the least ideal scenario for many who are considering rentvesting. With record low vacancies and an increasing shortage of homes, this is a low risk for many localities. But still, this is a factor to consider.
Nevertheless, there are many ways to reduce the risk of vacancy – like investing in areas that have a shortage of supply, or super jittery investors can take out insurance that will fund vacant periods for an agreed period.
3. Poor tenants and damage to property
This risk is low in many areas and can be mitigated by thoughtful research-based investing. Through our experience, we have met a lot of good tenants who want to make our customers’ investments their home. While this being said, it is always important to get landlord insurance as a backup plan, as it includes coverage for tenancy damage and can be extended to include a vast range of incidents.
These are the fears that often come from stories you hear in the media or from family and friends. While you can learn from other people’s experiences, it is important to recognise that you have to control and create your own.
Be selective in what advice you take in from friends and family and how this impacts you and the bigger picture.
Talk through your fears with professionals – you’d be surprised how easily we can put your fears at ease with an investment strategy specifically designed for you, your situation and your fears.
We know that fear is not easy to overcome.
But we believe that it should never stand in the way of living your dreams.
Remember … “Your fear should always be allowed to have a voice, and a seat in the vehicle of your life. But whatever you do — don’t let your fear DRIVE.” — Elizabeth Gilbert
We’re here to help so please feel free to send through any questions you have or your situation through to firstname.lastname@example.org. Alternatively, you can call us on 1300 424 970 to organise a time to chat.