Why you may lose money in real estate

I believe you must have heard this saying before,’ if wishes were horses beggars would ride’.The essence of this proverb is not to put the acquisition of wealth beyond the reach of any man but to emphasise the fact that nothing goes for nothing. To excel in any field of endeavour requires more than dreaming. It requires hard work and persistence along with other qualities. In real estate, the principles are so basic and the wealth vehicle is so tested that you will imagine that everybody would become a real estate millionaire. Although this is desirable, it is simply not the case. To ensure that you are not part of the unfortunate statistics, you need to address factors that can prevent or limit your attainment of your goals in this area.

Principal culprit in this area is a negative attitude towards real estate investment. A wise man once said that there are at least two kinds of people that cannot be helped; first, the man who does not know that he has a problem and secondly, the person who refuses to accept the solution to his or her problem.

There are individuals who defeat themselves by looking at all the negative issues about real estate investment. They seem to know all the tales of woe of those who have been defrauded in real estate. They also know all those who lost their land holdings to traditional land owners when they were supposed to make a profit on their investment. They are the nay sayers and doom prophets of the real estate industry. They tend to forget that in life there is no gain without some amount of pain.

In life, we are ruled by either our fear or our desire. If in the pursuit of a given dream or goal you are overcome by a feeling of fear, then you have failed before the battle begins. But if the intensity of your desire is strong then you will find a way to achieve your goal. You will find a way to save the money to buy that land and then build it. Even if you lost some properties due to one problem or the other, you will still find a way to invest. No wonder it is said that where there is a will, there will be a way.

Another subtle reason why you may not make money in real estate is if you are forever preparing and planning instead of taking action, making mistakes, learning and improving along the way. This is what is referred to as ‘’analysis paralysis’’. When you want to know everything there is to know about a subject before applying any of its principles, then you are not yet ready to succeed in that subject. We learn how to ride a bicycle by actually climbing on one, riding it, falling off and climbing again until we attain mastery. We learn by doing.

If you are serious about making money in real estate, start putting some of the things you have learnt into practice. Start reading the real estate columns in the papers. Start making calls to real estate practitioners and start negotiating properties. Start inspecting and start investing. Get together with your friends and combine your resources in order to invest in real estate. But whatever else you do, please don’t wait until the perfect time before acting. Do something with what you know where you are now and you will continue to improve.

It is amazing to me sometimes how education gets in the way of success in the life of some people. Many years ago, I was amazed that my barber bought a parcel of land, completed his building and moved into his property before many of my friends earning multiple times his income bought their first property.

While they were busy buying flashy cars to impress others, my barber joined a co-operative and was saving and investing. While many of them were busy criticizing emerging locations and calling them ‘bushes,’’ my barber went to one of such areas and bought a parcel of land. Today, if he decides to sell one of his holdings in one of such areas, he will be paid millions by ‘the men in suits’’. Why? While they were busy analysing and commenting, he acted on the little he knew and it has paid off well.

Another culprit that denies some of their golden opportunity in real estate is a narrow view of real estate investment. Research has shown that in most parts of the world, the greatest investment most people will ever make in real estate is their personal home. Once they achieve the goal of having their own home, many people will not bother acquiring more properties. A common excuse for this laid-back approach to life is a false sense of contentment with little. This is another dimension of short -term thinking.

Real estate is an investment and it has its own variant of diversification, long-term planning, and impact of inflation, financing and several other issues. It is both prudent and smart to invest widely and strategically. You never know where the true winners in your investment will end up surfacing 10, 20 or 30 years to come. You never know which of your real estate investment may end up being a marginal gainer. Think globally and think broadly. Both will serve you well at the end of the day. To reach your goal, release yourself from every limiting beliefs that have held you down and reach for the skies. 

Source:PunchNewspaper