When it comes to getting on the real estate ladder, many young people have a strong fear of missing out. They know that the longer they wait, the higher prices will get higher – leaving them behind.
Although their fear of missing out is strong, sometimes it’s no match for a different kind of fear – the fear of making the wrong decision.
People ask themselves questions like, “Should I go for it? Is it worth it?” and become perpetual fence-sitters. The time and energy they invest in over-analyzing every minute detail and concern cause them to miss out on good properties.
They get trapped in a loop, stuck between desire and need for action and crippling uncertainty, paralyzing self-doubt and fear of financial over investment.
If you are there yourself, then you know it’s a very uncomfortable position to be in. You have a vision of what you want to achieve and where you want to go with property investment, but you just don’t know where to place your first step.
Advice for the Most Common Analysis Paralysis Roadblocks
1. Not knowing how much to pay
A lot of people get confused by listed price, market value and purchase value. They are not the same thing – and can vary by $10,000’s.
So, you may be wondering, “how can I tell the true market value of a home. How do I know I won’t pay too much”?
The best way is to look at recent comparable sales. These are usually sales within the last year of properties in a similar area, condition, age, size, and layout. What is the price per square meter?
To find accurate comparable sales you need to consider property level, street level, and suburb level factors.
Know the current trends in the market. What is the growth potential of the area where you have located that property? Are prices staying the same? Answers you give to these questions will help you make a more informed decision.
Understanding the property’s true value protects you from getting carried away and paying too much while giving you the confidence to pull the trigger and buy.
2. Worrying about what the future holds
Another reason many people don’t buy great properties is that they are too uncertain about the future.
What will their job and income look like? Will they have a family and mouths to feed? Will they need to relocate or upsize? What will the real estate market do? Will interest rates rise?
People like this don’t feel comfortable proceeding unless they are in control and can forecast the future – which is, of course, an impossible thing to ask for.
So, if you identify with this kind of thinking you need to stop right now and reframe your perspective.
You can’t expect certainty or control, but you can prepare and have a plan A, B, and C.
You can look for properties that provide the most amount of flexibility and financial insulation so that no matter what life brings, there won’t be any need to worry about your investment property weighing you down.
It also pays to correctly do your research and planning. Make sure you know what your worst-case scenario is for repaying ongoing costs, renovations, and repairs and how you can cover these even if you do have a change of circumstances.
3. Not being able to recognize a great deal when they see one
Lastly, some other people just don’t know what they want – and can’t recognize it when they find it.
What does that mean? Well from my experience I see people who say they want to invest in property and get good financial returns but are not able to assess the property based on these terms.
Instead, they will look at a property emotionally and irrationally letting small insignificant defects, aesthetic issues or irrelevant factors colour their thinking. Instead, they should be looking at the numbers and seeing how the financial figures stack up – and what the hidden potential is.
The same goes for people who get emotionally attached to a certain ideal property. Often these people want to invest in their local suburb, or into a type of property they would personally like to live in. The problem is that these kinds of properties rarely make the best investments.
4. Shift your mindset
People who get stuck in analysis paralysis generally fear to make the wrong decisions – so they don’t make any decisions.
But the crucial thing they often don’t realize that doing nothing IS a decision, and it also has consequences.
The cost of not doing anything is real, and it could have already cost you more over the years than slightly overpaying on a property may have.
So, if you really want to overcome your fear of analysis paralysis, reframe the question to what am I losing out on today, tomorrow and next year if I don’t make a move?
And if you still find you are struggling, then why not call in the experts to help you proceed with confidence. At Sydney Home Buyer’s we are happy to have a free consultation with you and provide you with advice around your property buying options. Call us today to book an appointment.