Fear is probably the biggest obstacle to getting started. We’ve heard that from so many friends, family members, readers and colleagues. We know people who’ve built extremely successful businesses that are afraid to put a penny into real estate outside of their own home. We know real estate lawyers who are scared to invest in real estate, yet they know the business better than most investors. We know people who’ve built large six figure stock portfolios that think real estate is too risky, yet think nothing of speculating on a new mining stock. What we’re trying to say is that fear is normal. But the easiest way to conquer fear is to educate yourself, make a plan and then take action!
If you are surrounded by people who are afraid for you then it might be better to not to speak with them about your goals. Find like-minded people who are doing what you want to do. Talk to them about your goals instead. Find a way to put aside whatever is holding you back…do not worry about what anyone will say when you tell them you are going to buy your first property. You can do this – real estate investing is simple! It takes work – do not confuse simple with easy – but it’s something anyone can do! And we’re going to help you!!
Be confident that all you have to do is take it step by step, make a plan, learn the basics and take action! And before you know it you will be putting your first rent cheque in the bank and looking for your next property to purchase.
THE SIMPLE REV N YOU WITH REAL ESTATE
1. Set your goals: Where are you today? Where do you want to be in the future? Once you know that you can make a plan to move from today to tomorrow. Everyone has different goals and levels of risk tolerance. That’s o.k. As long as part of your goals is to make money and built your wealth with real estate (however large or small), and you’re new to real estate investing, then you are in the right place!
2.Research the markets: Look for places where you can find properties that meet your investment goals. This takes a bit of leg work but it’s critical to making good buying decisions. Sometimes you will be lucky enough to have great investments in your backyard, but if you are like us and live in one of the most expensive places in North America, you may find yourself looking outside of your own City.
3.Find a property: The trick with finding a property is to know what you’re looking for and what you are comparing it against. Then, you have to evaluate the property. This is where you have to get a calculator and a spreadsheet working…but simply stated you are looking for a property that will not cost you money each month. So when you add up all the expenses including the mortgage, taxes, insurance, maintenance and property management and you subtract that amount from the total rent you get each month, if that number is positive you have a green light to keep moving through the process. If it’s negative, you’ll want to look at it closely to see if you can make it positive. If not, look for a different property.
4.Buy it:You need financing, an inspection, a lawyer, and some final research to ensure this property really does meet your objectives. And, of course, knowing a few negotiation tactics won’t hurt either! But, basically you want to get control of the property, finalize your research and make sure the property is in the condition you expect! Then, buy it!
5.Make Money:If you’ve hired a property manager, there are things you’ll need to do to ensure that the property manager is working well for you. If you’ve decided to manage the property yourself, there is a lot to know about advertising your units, tenant selection and management, and general repairs. At this stage it’s all about maximizing your revenue while minimizing your expenses, the amount of time you spend and your stress!
Sounds simple enough doesn’t it? Remember the Seven Habits of Highly Effective Real Estate Investors that Julie wrote about a few months ago?
Knowing your goals is the first habit of an effective real estate investor, and it’s the first step in our process.
What better time to look at your goals then as a New Year rolls around!! So, please take a few moments before the New Year begins and plan your goals. Need some help… check out our older articles on goal setting for real estate…
“If what you are doing is not moving you toward your goals, then it’s moving you away from your goals.”
– Brian Tracy
Published December 29th, 2008