5 Fears That Keep You Away From Investing, And How To Beat Them
Property buying is often the biggest most expensive investment that an individual makes in his entire lifetime. While spending his savings over a real estate asset, investors do get the jitters before buying a property and sometimes refrain from taking the decisive step. With too much of market speculation, rising cost of property, tricky mortgage rules; today even a potential buyer is turning into a fence-sitter. Here are some of these fears which often overpowers an investor-
Fall in property prices
This is the biggest fear that an investor has. The falling property market is a nightmare for any buyer. However, an investor should understand that property prices never fall. They might remain stagnant for a while but anything which is developed with brick and mortar does not see a price cut. What falls is actually the asking value, which is the price expected by the seller. The real estate asset appreciates, though slow, but over a longer period of time, the returns are visible as well as measurable. Although the ideal investment is the one which offers you returns more than the inflation rate, real estate being affected by government policies, is a slow growing asset as compared to other investment channels.
Moreover, if you think that the neighbourhood would not remain as attractive as now, then buy in a location which is close to employment hubs or close to good schools. Properties in such locations are always in demand.
Extraordinary maintenance cost
A new home invites a number of new expenses. Furniture, appliances, interiors, furnishings, décor etc are some of them. You don't need to panic. Look for a house which has newly installed features and equipment along with freshly done interiors. Prefer to buy a new home so that you get a complete ready-to-move apartment which will not invite too much of expenses. Moreover, get small damages repaired on time so that it doesn't become a major problem in future. Keep a separate contingency fund to help you face any emergency situation.
Lack of confidence
Often buyers are not confident about their choice of home or fear buying a home with undiscovered defects or remain doubtful of a wrong decision due to budget and location. The best thing to do is to make a list of features, amenities and all those conveniences that you need. If the shortlisted property has all the features, go ahead with the deal. Real estate experts say that an investor should sleep over their decision before finalising on a deal. Alternatively, keep on looking for the deals till the time you find the ideal home that matches your needs at least.
Buyers get dicey when they aren't confident about their capability of repaying the mortgage. Without fixed, consistent income, taking a loan is not just risky but can also lead you to foreclosure. The best solution for this is to keep your budget realistic and factor in the inconsistency that you might face in your income. This will help you in better future planning and home buying. You can also get into a habit of saving a fixed amount every month to prevent overspending or to be a disciplined investor.
Tedious loan conditions
There are buyers who feel mortgages and loans are a difficult subject and are reluctant to enter into a deal with financial companies just because of the hefty paperwork required. Since this is unavoidable, an investor should educate himself on loan subjects which might help them with a home purchase. As one gets handy with bank terms and terminologies, a buyer would be able to see through the terms and conditions of the banks, which would be no more tricky or tedious for them.