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Turnkey Real Estate Investing

3 min read

Faith Versus Fear for Real Estate Investors

Fri, Mar 27, 2020

faithversusfear-riskinrealestateinvestment-recessionWe’re living through unprecedented uncertainty and fear amid the COVID-19 pandemic. Our news feeds and conversations are fraught with worry. And really, who can blame us? Not only do we see this pandemic sweeping across the world and claiming lives, but we also see already worrying economic repercussions.

Look to any news outlet and see what they have to say about the economy — it’s not good news.

However, there is a balance we all must strike. As real estate investors, we know that there are unique concerns and worries beyond the health and well-being of your families and communities. Allow us, then, to help quell your fears about real estate investment in this age of uncertainty. It won’t get rid of them, we know — but we also don’t need to remove fear entirely from the investing equation anyway.

It’s good to have a healthy sense of fear.

Fear can be enormously beneficial to our investment success. After all, fear keeps our ego in check. It stops us from ever believing that we can’t fail, can’t make a wrong move, or that we are never at risk. 

Be sure to check out: A Passive Investor’s Quick Guide to Risk Management

Fear is, for the most part, healthy. Fear can be mobilized and channeled into our due diligence efforts. Fear is harmful when it leads to emotional, knee-jerk decision-making. Let it be your gut-check and the level that keeps your decisions realistic and grounded. 

For the real estate investor, especially in times like these, it would be easy to lose the much-needed balance between fear and faith.

Real Estate Investors Need to Have Faith

There are few investment ventures more time-tested, more stable, and more sure than real estate investment. There’s a reason we think it is the best industry in which to grow wealth. When times like these threaten to overwhelm us and undermine our confidence in the things we invest in, it is more important than ever before to remember what we know to be true about real estate.

We’re not saying it’s a sure thing — nothing ever is. But rest assured, we have been here before. With over fifteen years of experience, REI Nation saw and survived the Great Recession. And from that experience, we have a lot of takeaways for our investors as we move into the economic unknown.

The Market Always Moves

If we need some certainty to cling to, look to the market cycle. We’ve talked about this cycle before. The four stages are:

  • Recovery
  • Expansion
  • Hypersupply
  • Recession

This is a continuous cycle that we have seen repeated for as long as the real estate industry has been around. Even if you look to the end of 2019, most experts were saying that we were overdue for a recession, given the level of market expansion at the time. 

What we’re seeing is unexpected in scale, but it has not broken the cycle’s mold. And, in turn, we know that, even in a recession, recovery will come in due time.

There’s Something on the Other Side of This

While everyone and everything around us seems to be in crisis mode, it is critical to remember that there is something — there is life — on the other side of this. It may not look like it now — it might seem like this season of fear and isolation will last forever. While it may change systems, it may change lives, it will not last forever.

If you’re a young investor, don’t fret. You have plenty of time to see this through to the other side and beyond. If you are not a young investor, all is not lost. The steps you take now can help secure the best outcome possible for your future and retirement. Speak to your financial or portfolio advisor if you are fearful of the future.

Investors Play a Pivotal Role

Lastly, we have to remember the role that investors play. During the Great Recession, investors played a pivotal role in market recovery as they bought foreclosed properties and stimulated a floundering real estate market.

Circumstances are different now, but one thing remains the same — investors play a pivotal role in market health and recovery. Even as we look to preserve and grow our wealth in times of crisis, we, more importantly, look to the positive impact we can have on our communities and in our world. Investors of all kinds have in them the ability to help turn the economic tide — and ultimately lead the way to market recovery.

We’ve been here before. Take comfort in that. And if you fear, let fear motivate your future: to be more diligent, more engaged, and more informed than ever before. 

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Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at REI Nation, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.