Worried About the Real Estate Market? Here’s the Secret to Investing

If you want to lose your mind, try to keep up with all the predictions being made about the real estate market. Doing so is exhausting. Even if some interpretations and predictions have merit, they’re just that – predictions. In many ways, the headlines are designed to scare us. Navigating news on the real estate market is frustrating: full of mixed messages and emotionally charged rhetoric.

And for every opinion you see, you’ll find one to counter it. 

So, how do we move forward without fear as real estate investors? After all, we don't have time to be paralyzed by every doom-and-gloom headline. You're in luck - here are the secrets to fearless real estate investing.

5 Secrets to Fearless Real Estate Investing

Secret #1 – Zoom in.

We’ve said it before, and we’ll say it again: the real estate market is not a monolith. When you look at headlines, they’re almost always talking about an aggregation of medians and averages across the whole of the United States. But obviously, the real estate market in Sacramento, California, is very different from the market in Memphis, Tennessee!

Real estate investors can find the conditions that satisfy their property prices, rental demand, and cash flow standards. The individual market – the location! – where you invest makes all the difference in the world. Focus on your markets. While you want to remember the big picture, recognize that conditions, challenges, and benefits vary widely depending on where you buy.

Secret #2 – Play the long game.

A long-term view of the real estate market, the economy, and your investment portfolio will remove much of the stress you may be feeling. Remember, the market is cyclical. The length of each stage of the cycle may vary, but it moves in a predictable pattern. Because of that, we can relax a little, knowing that if conditions aren’t ideal now, they’ll change. We don’t have to fear a downturn because we know the cycle will march on. The timing may not be predictable, but the cycle is.

Here’s the key – don’t simply “wait out” the times that don’t obviously benefit your portfolio. Instead, adapt your strategies. Make the most of the time you have right now, no matter the conditions. 

Secret #3 – Mitigate the risks you know.

We can’t always anticipate or reduce risk because the future isn’t set in stone. The unexpected is always a possibility. That’s why it’s so crucial for investors to mitigate the risks they can identify and control. When you’ve adequately handled the no-brainers, you’ll be better equipped to absorb these unforeseen risks. We call this due diligence: taking every available step to foresee, manage, and minimize risk exposure.

What does due diligence look like for a passive real estate investor? Here’s your checklist.

Be prudent. Sometimes, more risk doesn’t mean more reward – it just means more to lose. Know the difference and cull risk where you can!

Secret #4 – Stick to your standards.

One of the biggest portfolio killers is compromise. Overpaying, settling for less, or letting subpar performance slide will put you in the proverbial spot between a rock and a hard place. Your margins are important, and the economic challenges of the day will shrink your wiggle room. Never take an opportunity just because it’s available. Take it because it’s right for you and your portfolio. 

Now, this doesn’t mean your standards never change. Revisit, adapt, and adjust your expectations as you gain experience. But in the heat of the moment, stick to your guns. Follow the proper procedures, do your due diligence, and don’t take a chance on subpar properties.

Secret #5 – Review and tweak your portfolio.

One of the best ways to reduce investing fear is to stay informed and engaged. You may be a passive real estate investor, but that doesn’t mean you aren’t at the helm. Other people may handle the day-to-day operations and keep each piece of your portfolio running smoothly, but you’re responsible for the big picture.

Review, assess, and adjust your portfolio as necessary. This ensures that every property you own, every asset you hold, is working towards your goals. 

Remember, you can only control what you can control. The flurry of opinions and predictions ultimately won’t decide the success of your investments. You will – with strategic planning, informed decision-making, and attentive risk management!

Leverage our experience for YOUR benefit. Build a passive real estate investment portfolio with REI Nation!

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