Real estate investing can be a highly lucrative undertaking, and to a lot of people, the idea of investing in real estate is an intriguing prospect that they’d love to try. However, most people don’t ever actually take the initial leap. While it’s true there needs to be a bit of a financial buy-in to get started, finances aren’t what keep most people from getting involved in the real estate market.
The true obstacle between wanting to invest and actually investing isn’t financial at all. It’s mental. That’s right; the biggest reason why more people aren’t investing in real estate is literally in their heads.
What Kind of Mindset Do You Need?
In order to be successful at anything, you need the right mindset, and real estate investing is no different. Sure, you’ll need a sense of commitment and drive, but to get started, you should be asking yourself a few other questions..
Are you learning about real estate investing? We’re typically more nervous about something if we don’t understand it. The real estate investment landscape can seem overwhelming, but there are plenty of resources meant to help beginners navigate that landscape. If you read up on it, you’ll understand the game. You can also find an agent who can help you learn more. With better knowledge, you are more likely to take the leap and go the distance.
Are you surrounding yourself with people who not only support your vision, but want to help you achieve it? There are few things that can drag you down faster than someone in your life who is questioning your abilities or pushing you to walk away from the idea. You stand a much better chance of succeeding if you can surround yourself with a support system that pushes you out of your comfort zone and encourages you to go after your dream.
Do you have a plan with smart goals? While wanting to invest in real estate is a great idea, it’s not a plan of its own. You should sit down and make a plan with actionable, time-based goals that can help you approach expected obstacles. It can go a long way toward helping to motivate you. If you can work through some of the things standing in your path, that should only fuel your desire.
The Financial Obstacle
Even with the right mindset, there still might be a tangible obstacle in your way—the financial barrier. Depending on what type of real estate investing you get into, you might need a few thousand dollars or much more to get started. For some investors, that’s not a big deal; for others, that barrier might mean the difference between getting in the game and watching from the sidelines.
Not being able to afford the initial investment right now doesn’t have to be a dream-ending event. In fact, if you did the mindset exercises above, then you’ve already done some thinking about how to approach the money problem. You might not be able to afford it today, but with your motivated mindset—and supportive people in your life—you should be able to come up with some creative ways to get that money together.
Maybe you go without Netflix or other entertainment subscriptions for a while. Or start cooking more at home instead of going out. Or have a garage sale and get rid of things you don’t use or need. These are a few ways to rely on your current income and save the money yourself.
If the need for funding is low enough, you could rely on a personal loan to cover the initial down payment. Alternatively, you could try dipping into your home equity. For any of these options, you’ll want to look for lower rates as well as feasible repayment terms. The last thing you need is to land yourself in the red at the outset..
It might mean having to wait a bit to get your feet wet, but the extra time is perfect for learning more about the market and how to invest in a smarter way.
A lot of people want to invest in real estate, but most won’t ever try. They’ll let their minds talk them out of it. If you want to stop talking and overcome the jitters, then make a plan and get going. Once you have that mindset, you can push through all the obstacles and get started on the path to wealth.
Dan is a guest blogger from dinks.co. He’s in a dual income no kids relationship with his wife June. They’re homeowners who are working on advancing their careers. If you’d like to submit a guest post for Real Estate Therapy, please reach out to me at cynthiacummins.com and we’ll make it happen!