Oh, that’s an easy one. I can answer that in one word. FEAR.
Real Estate investment is a great way to change just about everything in your life, but it’s one of those things where doing it for the FIRST time is the toughest. In fact, the second is exponentially easier! It’s fear folks, plain and simple! And why it is fear doesn’t make much sense to me. Consider that:
– “Everyone knows that the surest path from low income to millionaire is through real estate.” This appears to be a well-documented truism. I’ve seen a similar statement in some of the most prestigious financial resources on the planet.
– I rarely hear of someone losing it all from real estate. I might be living in la-la land, but for the most part I only hear of people prospering from real estate investing. Sure, occasionally I hear of a deal going bad or growing complicated, but not to the point of ruining people.
– There are a lot of properties available. People are still selling, divorcing, dying, or just not paying the bills and getting their homes sold out from under them. Much of the mortgagee auction activity is not SEEN by the public, but most of it is available to the public.
– There are a lot of properties available at below market prices. That’s been my experience anyway. Of course, I have people right here in my area that tell me they can’t find properties. I just smile and nod my head.
– Rental demand is strong and rents never go down!
So with all this common knowledge and raw opportunity out there, why isn’t everyone investing in real estate?
Here’s my theory.
* Real estate transactions are more involved than going to K-Mart for a pair of undies, so that scares people. You have to learn a little bit. Mind you, this isn’t a lot of learning, but it is apparently enough to keep some on the sidelines.
* The numbers are big. I’ve seen folks nearly FREEZE UP mentally talking about large amounts of money. Merely talking about a $400,000 mortgage causes some people to break out in a sweat.
* Horror stories. Everyone’s heard about some scam, sink hole, meteor or something else on the fringes of believability that has happened somewhere at sometime. I mean, there is SOME risk involved.
* Fear of taking action! It’s hard to do something you’ve never done, and harder to do something you’ve never done before in a subject matter on which you aren’t an expert! People fear something, which makes facing that fear hard. What I’m referring to is what I call, “IT’S EASIER NOT TO.”
So what does one do to face fear and make a change in their life,
Ah, that’s just as easy as the first question. I can also answer that in one word…KNOWLEDGE.
Once properly armed with the knowledge they need, most people can overcome their fears to the point of taking action.
So if you are contemplating taking your financial future into your own hands by investing in real estate, FOCUS on one thing for the next 3-6 months. Buy books or courses, got to real estate investing club meetings, visit websites and get on discussion groups. Let those things be your action steps for awhile. I suspect you’ll be ready to dive into the market with the knowledge you’ll gain.
“Knowledge Always Precedes the Money.”
Author: Melanie Burns
If you have found a property, or are looking at refinancing to access equity so you can take the leap into Real Estate Investment then contact us to discuss your home loan options. Whether you are self-employed, PAYG, credit impaired, looking to invest via Self Managed Super or looking to construct, or even if you are seeking funding for a commercial property the team at Sherlock Holmes are mortgage specialists here to help you finance your dreams!