5 EMOTIONS YOU WILL FEEL WHEN BUYING YOUR FIRST PROPERTY
Buying your first property can be a bit like a roller coaster ride. All the ups and downs, fear and excitement can leave you feeling a bit green.
The best way to prepare for the emotional journey ahead is to arm yourself with as much knowledge as possible.
Then, it is just a matter of having the right strategy with a contingency plan to boot.
Whether you are an investor or a first home buyer, here’s five emotions you are likely to feel during your foray into property ownership.
It’s the what-ifs that are the biggest killer.
What if I lose my job and can’t afford the repayments? What if I can’t get any tenants? What if the tenants I do get trash the place?
And so on…
Fear of the unknown and fear of disaster – these are the simple emotions that hold most people back in life.
For Nathan Birch, it was fear of a different kind that prompted him to start investing.
The co-founder of Binvested says that despite his friends and family warning him of all the things that could go wrong in his investing, he was more scared of going nowhere in life.
He was scared of being stuck at a job he hated well into old age, with little or no wealth to show for it.
This is why he took the plunge and built a property portfolio.
He says, the best way of dealing with fear is to develop a strategy that mitigates against risk.
By buying properties below market value, for instance, you will be able to break even if you suddenly need to sell.
Buying in a good growth area mitigates against the risk that the property will go down in value or be vacant for a long period of time.
Making sure the property has a strong cash flow means you will not be putting your bottom line at risk if you find yourself without an income.
Like a child on Christmas Eve, buying a property has the potential to keep you awake at night.
Once you have overcome the first hurdle of fear, excitement is a much more pleasant emotion to feel.
It is worth remembering, though, that the two emotions are almost identical in nature.
Think about it. They both get your heart pumping, and they distract you from your daily duties. These emotions can affect your ability to make sound decisions.
It is important to treat buying properties as a business practice. This applies to your PPOR too! Make sure you don’t let excitement lead you astray. Make each purchase based on a logical consideration of the numbers involved, as well as the market.
What is the point in buying something that excites you if it will put you out of pocket and hold you back?
We can guarantee that the excitement you feel will wear thin quickly if the property turns out to be a dud.
Nothing takes the fun out of buying your first home as much as dread.
Dread makes the buying process unbearable. If you have been going to auction-after-auction in the hope of buying your first house, it can be hard to stay optimistic about the whole thing.
But this doesn’t mean you should give up. A change of approach could hold the answer. It may be possible to own your first home without ever attending an auction.
Binvested can sometimes offer bank repossession deals to clients. We also organise bulk land deals that enable our clients to build a new house for less than market value.
If you stay informed about the options available to you, you will increase your chances at finding the right property at a good price.
Buying an investment property can be an overwhelming process.
First of all, there is the matter of getting finance – but not just any loan will do. You have to compare interest rates, fees, redraw or offset facilities, and you even have to know the lender’s stance on releasing equity.
As if that wasn’t confusing enough, you then have to go over your income documents and liabilities, look at your credit history and figure out how much each bank will actually lend you.
After you get all of this sorted, you have to develop a strategy and figure out what type of property you will buy. Is cash flow or capital growth better? What city should you buy in? What are the ongoing costs involved? Does the rent cover all of this?
The best way to deal with all of this confusion is to engage a team of professionals who you can trust. A finance strategist, buyer’s agent, accountant and lawyer can help you throughout the whole process. Think of them as your success team; a team of advisers that will hold your hand and stop you from making major mistakes.
It is natural to feel pleased with yourself after buying your first property. It was quite a mountain to climb, and you did it!
After you have celebrated this momentous achievement, it is time to come back down to earth. Knuckle down and focus on the next stage of your journey. How many more will you need to acquire before you can consolidate your portfolio? What is your time frame? How will you achieve this?
Carry pride in your heart as you keep on hustling to reach that final goal – but, don’t forget that you aren’t there yet.
Only then will you be able to tell your boss where to go.
And when you do, remember that if you want the world to be able to break out of the lifetime of daily grind system, then it is up to you to help others.
Just imagine if your friends, family members and even complete strangers were able to benefit from your journey as an investor. This would bring you something more than pride.
It would bring contentment.