Top 3 Fears that Prevent Property Investors from Buying

Miriam Sandkuhler, CEO of Property Mavens (independent property advisory firm) gets candid about the top 3 fears that prevent property investors from buying. From years of experience and expertise, she sheds light on these common fears and how to get beyond them.

1. Fear of Debt

“One of the biggest fears I see is people are fearful of debt.” Imagine being approved to borrow $1 million, but only wanting to spend $600,000 because having that amount of debt can seem very scary.

Instead, Focus on Cash flow: You need to shift fear of debt to a better understanding of cash flow and servicing debt. Consider the interest payments that come from having the debt, and the income you will receive from the rental property to offset the interest cost.

Understand the figures around cash flow and then decide on the affordability of it by knowing the shortfall between the two. Remember, you are buying an asset and it’s important to wrap your head around that concept of how all these pieces fit together.

2. Fear of Making a Decision

“Making a decision becomes a commitment. It’s a commitment to purchase an asset that will carry debt, responsibility, having to manage cash flow, and maybe adapting your lifestyle.” People are often fearful of deciding to purchase the property because it can bring up anxiety around those issues.

Address Your Fears: Instead of increasing your anxiety and stress, address your fears head-on. Miriam has her clients list all of their concerns and then helps them to put a plan in place to provide solutions for those fears, so they can be comfortable with moving forward.

3. Fear of Timing

“People confuse timing the market with time in the market. People are fearful of buying at the top of the market and think that they are too late, so they should wait for it to drop.” Timing the cycle is only important if you are flipping a property, but not so important if you are buying with a long term buy and hold strategy. Miriam warns that unless you have a crystal ball, you can’t possibly know where the top of the market is!

Pick the Right Asset, Not the Cycle: Don’t stand in your own way, make a decision. It’s more important to pick the asset than to time the cycle. Otherwise, you could be creating a missed opportunity resulting in hundreds of thousands of dollars of missed capital growth. The right asset, in the right location, at the right price, with the right attributes and time will work in your favour.

If you can relate to some of these very common property investment fears then be sure to check out Property Mavens website for more tips and insight from Miriam and her team of professionals.

A buyer’s agent in Melbourne or your own city can help you make more informed choices. If you’re looking for a buyer’s advocate in Melbourne to help assist you with purchasing an investment property, Property Mavens has you covered. 

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About Miriam Sandkuhler, Property Investment Advisor