Fears in real estate are common among investors regardless of their experience in the matter.
And no matter how much you think you are well-prepared to take that leap of faith, you still can’t get past your fear.
Whether you are concerned about losing money or troubles with tenants or in the contract, there is always something that scares real estate investors from going all the way.
Which is why we rounded up 4 common fears in real estate that are the reason why real estate investors are holding off on buying properties and the proper ways to overcome them.
1- Property Devaluation
There are many reasons that can cause a loss in property value and if not taken into consideration before purchasing, it will lead to a huge loss of money.
Yes! The market isn’t stable and there many uncontrollable circumstances that can lead to property devaluation such as economic or political conditions.
On the other hand, what investors can control is choosing a property that is strategically located near vital areas in the city from hotels, schools, malls…etc.
Choosing a property in an attractive area is what will ensure your property keeps its value despite the circumstances.
And for under construction projects, investors should consider the surroundings before putting all of their money on the property.
2- Excessive Maintenance Costs
These are what real estate experts call “hidden costs”. The extra costs you never see coming.
However, there is always a smart way when buying properties to lessen these inevitable costs nonetheless.
You could buy a new house that no one has ever lived in before.
Another option would be to buy a house that had major maintenance and is well-maintained so that you are only left with minor stuff to maintain.
Whether you buy a new or well-maintained property, you should start first by a thorough inspection of the property.
In all cases, it is advisable to keep a sum of money or as real estate experts like to call “emergency fund” and try adding to it every month just to be safe!
Temptation is everywhere and if you are the kind of buyer who tends to feel regret after a purchase then you ought to take some steps before buying to guarantee you buy what satisfies you.
Here would a great time to hire a real estate agent who will work with you day and night to make sure your needs are met.
Expert agents will start asking you questions about your requirements and needs with a certain purchase, understand what you truly need in a house and your budget.
That way you feel satisfied and convinced even when new and beautiful houses come out.
4- Inability to pay the real estate loan
What if you the property didn’t generate as many profits as you were hoping?
What if you lost your job and you don’t have another source of money to pay your loan?
Well, if you are an investor whose investment relies solely on rentals, it is better if you hire a property management company.
Such companies will take care of everything from lease agreements, tenants screening process, marketing the property and handling any repairs the property need.
And if you are purchasing a house of your own, then as we mentioned earlier, you should be saving some emergency fund for times like these.
Some experts even advise saving the emergency money even before you go and take any loans or purchase any property.
That way you are safe for a while to pay the loan and any extra expenses the house might needs till you figure out another way to get a steady paycheck.