As we all know, that the opposite of risk is control. What you don’t have full control over turns to be risky. And you can’t have control over something without knowledge.
Imagine somebody that haven’t when to a flight school, or enroll for any flight training. Get into the pilot sit of your plane or the plane you are onboard to fry the plane. What will your action be? Get out right! Why? Because of some perceived risk! But what if he went to a flight school? He minimize risk of clashed.
That’s same with real estate investors, or an entrepreneur. A investment or a business can be risky if you don’t know what you are doing. But when a investor, began to take the right seminars, take the right course, right coach, and read the right book and articles he minimize is risk.
Knowledge give control
Why investing without knowledge.
My point is that it is never the investment or asset class, either(business, real estate, paper asset, or commodity) that is important. Success or failure, bankruptcy or foreclosure, depends on how smart you are.
The average investor doesn’t know the difference between investing for cash flow and investing for capital gains. Most investors invest for capital gains, hoping and praying the price of their stock or ho!e goes up. As long as you have more cash flowing in than flowing out. Your investment is a good investment. So when a investor know what doing and do it the right way. Real estate can provide great returns through rentals income, tax advantage and capital appreciation. Gained from buying the market value.
Investing In real estate is for everyone, every age, though it takes time to learn and competently or confidently invest. It takes perseverance and effort to find awesome deals, because the only way a investor can minimize risk, is through knowledge.
Reasons many real estate investors fail.
1. Not enough education:
I’ve get to know enough of our forks telling me how they were able to financed the down payment of their first property with there credit card. They were more happy they’ve win, by becoming a landlord. But such financing is wrong. Much especially with such high interest credit card can quickly accrued.
So see? Such people jump into the market without first understanding what they were doing. And the end of such action is disaster. They just decide that real estate can be the right path on there journey to financial freedom. Or whatever but never use the right financing.
Being busy and being effective are two different things all together and this has being the case with a lot of real estate investors. They Believe that because they are buying properties they are going to succeed.
Am not saying that you mustn’t make any mistake. You will make mistakes. There will be frustration, wasted time and money. Every successful real estate investor has gone through that. But what’s makes them successful is that they have persevered through it and found the solutions that work. That is why, it is important having someone who has already being in the business. And experience with different aspect of real estate holding. Your hand in the beginning and coaching you overcome such challenge.
2. Not enough time:
Real estate is usually started as a side business, while keeping another job. However, many investors fail to treat it as a business.
Even though you will be investing in real-estate as a side hustle. You need to devote some good time on running the deal and educating your self. And because of this they left some room for error in property management. Many don’t have good if any screening exercise for tenants. In the name of no time. Or aren’t strict on rent collections. Or slack on any other number of huge list of things a property manager is responsible for.
But fortunately, time management skills are easy to learn. if you struggle with time management, keep a log of how you spend your time for one week (with a pen or by using time-tracking app like Timedoctor.
3. Inability to take consistent action in a long period time.
Are you prepared to get into this game for the long haul? Or are you ready for the ups and downs that will come with your rental properties?
“What? You mean rental property investing is not a get rich- quick activity? Yes that’s what I mean.
Although incredible wealth has been built by those who own rental properties. However, the wealth has never been built overnight. Instead generating wealth through real estate means taking consistent Acton over a long period of time.