Hi Everyone,
I hope that you are all doing well.
This week I closed on a rental property in Hamilton, Ontario, Canada.
Yay!
The process of purchasing rental properties is becoming very familiar to me now. The process almost feels automatic. However, it wasn’t always that way…
One of the biggest discoveries that I have made recently, that I would like to share with new and prospective real estate investors is this…
There is a secret to becoming a successful real estate investor.
This ‘secret’ as I like to call it, may not seem obvious at first. The secret is however the linchpin to all future success in real estate investing.
Once you understand what this secret is, it is easy to see how some people become very good and experienced at real estate investing, while others who attempt to become successful, fail.
The secret is simply this…
Successful real estate investors are afraid of investing in real estate, however, they are able to manage this fear.
This may seem like a confusing statement. It is however not confusing at all. Let me explain…
No matter how successful a real estate investor becomes, the individual always experiences a degree of fear with regards to real estate investing.
This fear may be centered around having a vacant rental unit, selecting tenants, obtaining financing, or growing their real estate portfolio.
I know all about this fear because I experience it.
Here is where this blog post gets interesting… (if it has not already)
- Successful and experienced real estate investors are able to manage this fear.
The key to success is being able to manage this fear.
For example, as I mentioned above, I closed on a townhouse in Hamilton, Ontario, Canada this week. With every property purchase that I have made, I have experienced a degree of fear. More appropriately put, this fear has more so been anxiety that I have experienced.
I think that every experienced real estate investor feels some sort of anxiety or fear with each property acquisition, no matter how many properties they may have.
For myself, I was experiencing anxiety with regards to finding tenants for this property. I was concerned that due to the time of the year (the end of summer), the property may sit vacant for a couple of months, as the rental market that I invest in, tends to slow down a bit come September.
New and aspiring real estate investors allow this fear to consume them. Fear paralyzes them, and because of this, they end up never taking any action! Which translates into….
NEVER BUYING THEIR FIRST RENTAL PROPERTY!!!
Experienced real estate investors are able to manage this fear because they are resourceful, and they know where to get answers when they need them.
For example, I am resourceful, and I rely on my real estate team. Members of my real estate team have strengths that I do not.
I am become more confident about real estate investing because I know that my real estate team is good at what they do.
For example, my fear of having a vacant unit was quickly reduced when the property manager that I work with ADP Property Management, contacted me 2 days after my closing date, with a tenant that wants to move in September 1st. If this works out with the tenant, they will move in simply 7 days after I closed on the property. Not bad in my books!
Once again, I was able to manage this anxiety by working with the right people. My property manager has the knowledge and the network, in order to provide me with a list of potential tenants that I can chose from.
So as you can see, although I keep on plugging away as a real estate investor, there are still things that I am afraid of, or that I experience anxiety over. In this example, it was the anxiety of having a vacant unit for 2 months plus…
I know how to eliminate and reduce this fear, because I know where to get answers.
This is the biggest difference between the experienced real estate investors and the investors just starting out.
The new investors trying to get things going, often do not know where to get the answers to their important questions. They often do not know who the right people are to network with. It is because of this, that many of the new investors fail at real estate investing, or don’t even start investing because they are too overwhelmed.
In order to become better as a real estate investor, you have to understand and embrace the fact that you will be afraid of certain things, however, you have to forge ahead and manage those fears.
Your resourcefulness and the people you know in your real estate network will help you to manage and or eliminate these fears.
To keep up to date with my blog, you can enter your e-mail address on the LEFT hand said of my blog.
To receive The First Rental Property Newsletter, you can enter your e-mail address on the RIGHT hand side of the blog. In this newsletter, experienced real estate investors will share with you what they went through when they purchased their first rental property. They will also share with you some tips and tricks that you can implement when you buy your first rental property.
Best Regards,
Neil.
[…] and I were going over some details of the renovations that were completed on my recent rental property purchase in Hamilton, […]
Vacancy was one of my greatest fears before buying my first property, but finding a great property manager and speaking with other investors that had great success with that same property manager put my mind at ease.
Another fear I had was the thought that prices may decline leaving me with a loss, or negative equity. I remind myself that as long as there is cash flow, eventually a gain will be made. Looking at a price index, there are dips, but values are always up over a 5-10 year horizon. Since my investments are for the long-term, the risk of loss is minimal.
When it comes to managing fear in order to take action, it can be helpful to look at what will happen if you DON’T take action. If you look at all the great opportunities you’d probably be missing out on as a result of making smart investments, it becomes scary to NOT move forward. Tenants, toilets and vacancy don’t scare me nearly as much as working in a cubicle until age 65+.
Well said Andrew! As long as the property is cash flowing and you can wait it out if there is negative equity, then you can’t go wrong with a real estate investment.