KEEPING THE EMOTIONS OUT OF REAL ESTATE INVESTING
Any other parents of teenagers seeing all of the “elements” of emotions on this Valentine’s Day?
While February 14th may have drama and emotions of all types, the goal in real estate investing is to keep as much emotion out of the process as is possible. Do we celebrate a win? Absolutely! Are we disappointed when a good deal falls apart? Of course! Are we truly shocked by some of the banking and underwriter rules—oh wait, that’s a story for another day….
The goal for investors is to keep it rational, stick to systems, and follow your strategy. Ideally, when you walk into an investment property—you do NOT want to fall in love with it. Nope. You’re not going to live there! Before you enter that property, you want to be analyzing cashflow, return on investment, ideal tenant profile, and more! That gut check—walking into the property and around the neighbourhood—that is a final step.
The next trickiest emotion is anger—usually with a tenant issue. The temptation is to get mad, rant and rave, maybe try to get even. None of these emotions will help you solve the problem. So, it probably wasn’t your fault, it probably isn’t fair, and you simply have to get over the emotion to deal with the issue. Maybe you can solve it yourself, maybe you need to get the courts involved and maybe you’ll need to follow up with collections. Yes, you have the right to be angry—but it won’t help you solve the problem and move on. Tenants are like any other customer—one way or another, deal with it.
And what about all the levels of fear that come with real estate investing? I can hear the “what if’s” coming through cyberspace already! What if we lose money? What if we have a bad tenant? What if there’s a problem with the house like a fire or flood? A lot of fears stop investors in their tracks. And when you listen to every horror story out there, it can truly feel overwhelming. But are you truly committed to creating a financial future for your family: security, freedom, or legacy wealth? If you are, then you and fear need to get well acquainted! Scary stuff will happen in your investing from time to time. Luckily there are a lot of ways to deal with it: grow and learn with a network of investors, create a great team of people to help you with your investments, or joint venture with someone else who will invest the time and energy to deal with all those headaches!
Valentine’s Day comes with a lot of emotions: the good, the bad and the ugly. But real estate investing should be as rational and strategic as you are capable of. For our experienced friends: each time you fall off the wagon and into the emotional fields—just climb back on as soon as possible! And for our beginner friends: just know that the emotions will appear—usually when you thought you had everything under control! That’s normal—just find ways to count to 3, take a breath, or step away for a minute. Your financial freedom matters enough to figure it out and keep going!
