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Turnkey Real Estate Investing

4 min read

Is FOMO Hurting Your Investment Portfolio?

Thu, Mar 21, 2024

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Sometimes, the best deals you do are the ones you said “no” to.

“How is that possible?” you might ask. We live in a time when the real estate market is competitive and contentious. That’s true for the average buyer, and it’s true for investors. Even now, we sense FOMO – the fear of missing out – plaguing the real estate industry. Potential homebuyers are afraid they won’t win their bid. Investors are worried they’ll miss out on once-in-a-lifetime deals. They think they’re doing something wrong if they’re not participating in the hottest new investment market.

But sometimes, staying out of it is better than jumping in.

The FOMO Phenomenon

Let’s think back to 2021. The pandemic-fueled market frenzy created a wildly competitive housing market, with buyers throwing elbows and doing everything they could to win the bid. Unfortunately, that led to many homebuyers (three-fourths of them) regretting their home purchases.

Swept up in the excitement and fear, they often overpaid and overextended their budget. Under different circumstances, they probably wouldn’t have been okay with paying so much.

Investors aren’t immune to these emotions, either. If we’re not careful, we can base our decisions on fleeting emotions rather than reliable numbers and steadfast goals. Here’s how investors can stay on track and better know when to say “no!”

5 Ways to Keep FOMO Out of the Equation

#1 – Develop a clear long-term plan.

Too many real estate investors are only thinking about the next year or so. You’re more prone to shifting off-course if you don’t have long-term vision (10 years or more). Ask yourself, “Why do I want to buy this property?” When you have long-term goals and plans for your portfolio, you’ll be able to see if this property serves your ambitions or if it squanders your potential.

Stay focused.

#2 – Understand your KPIs.

What are you looking for in rental property performance? Are you investing primarily for cash flow, appreciation, or both? What numbers really matter to you at the end of each month? It’s okay to wait for properties that provide what you require. Don’t lower your standards just because nothing is coming along. Remain focused on the metrics that matter. Numbers offer objectivity, whereas FOMO obscures wisdom.

#3 – Practice patience.

A lot of pressure is put on investors to scale, scale, scale. And yes – scaling is good. It’s essential. But portfolio growth, for its own sake, is short-sighted. Grow when the opportunity is right, not just because it’s what you’re supposed to do! 

And listen – there’s plenty of debate over whether or not now is a good time to invest in real estate. We don’t anticipate the market getting easier this year or the next. There will always be challenges. If you decide to wait, you may be waiting forever.

And in this business, time is money. That doesn’t mean, though, that investors need to rush! Practice patience. Wait for the opportunities that meet your standards and suit your needs. Just because “everyone” is jumping into xyz market doesn’t mean you need to, too.

#4 – Remind yourself of the risks and opportunity cost.

FOMO, hype culture, whatever you want to call it, has a habit of making us forget the risk and cost of our decision-making. Thinking about risk isn’t about living in fear. It’s about making good decisions. It brings us back down to reality.

For example, buying cheap investment properties might be easier and faster than going for a higher real estate class. You’ll scale more slowly and likely won’t own as many properties when it’s all said and done. But what’s better – owning 20 cheap properties with little appreciation potential or 5 premium properties with great projections? We’ll tell you right now: the real money is in those premium offerings! 

Every decision comes with a trade-off. Every property presents risks. Diligently evaluate what you are and aren’t willing to put up with and act accordingly.

#5 – Get comfortable with saying “no.”

Real estate investors sometimes struggle with “what ifs.” We never like skipping an opportunity that could have been amazing. Saying no feels like closing a door. It feels like hurting your portfolio. But we encourage you to start saying no. Wait for the opportunities, the properties, and partnerships that are right rather than the ones that are there. 

You’ll build a stronger, more cohesive portfolio for it! 


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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.