I should start off by disclosing that I never actually performed any kind of official survey to answer this question. This is just my perspective after owning different types of real estate for about 8 years now and having dozens, or hundreds of conversations where real estate investing came up.
I believe the number one reason people don’t invest in real estate is the exact same reason they don’t invest in the stock market. It is the same reason they don’t start their own business. It is the same reason they don’t try out a new hobby.
I believe it all boils down to fear. Fear of the unknown. Fear of failure. Fear that tomorrow won’t be better than today. I think that people would rather accept a reasonably ok today than a potentially better tomorrow.
What do I mean by that? Well, I think that we all get comfortable in our current state. Even if we don’t like what our current state is we stick around because it is familiar to us. We are scared that if we try to change, we might end up in a worse place than we are today.
This affects every area of our lives. But one place I have seen it repeatedly is in regards to real estate. I can’t tell you how many times I have heard someone say to me, after they hear a little of my story and how I have several rental properties, “Ya, I wish I had done what you did.” Or “I’ve always thought about getting into real estate.”
I’ve never quite understood these comments. I guess I could understand if it was coming from somebody who was 80 years old and didn’t want to take on the stress/risk of rental properties.
What I can’t understand is when the people I am talking to are just a few years older than me. They may be in their early 30’s or early 40’s. But they say it as if they have lost their chance.
Could I repeat the same thing I have been able to achieve if I had to start all over again? No, not exactly. Some things I would do better. Some mistakes I would avoid. But I would also make new mistakes. And the current housing market is different which would bring some new challenges as well as new opportunities.
But could I reasonably expect to achieve similar results? Yes, I completely believe I could. And it’s why I continue to recommend real estate to my family and friends. Few have taken me up on it, but some have.
Fear keeps people working a job that doesn’t pay well and in an industry that they don’t like. Fear keeps people making the same choices again and again.
I understand having a fear of the unknown. I have felt it many times. But, for whatever reason, the fear of the present has scared me more than the fear of the future. I have never experienced in my life this thought, “Boy, I sure wish nothing changes over the next 10 years. Life is so good right now. I hope it doesn’t get any better.”
For whatever reason, I have always had the mentality, “well, what’s the worse that can happen?” I try to come up with a realistic worst case scenario. And usually, if I can live with that worst case scenario, I’ll more than likely move forward with whatever I was trying to decide.
There is a series of verses in the Bible that are probably fairly familiar to most people, even if they don’t read the Bible. It’s in Matthew chapter 6.
“Therefore I tell you, do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will wear. Is not life more than food, and the body more than clothing? Look at the birds of the air: they neither sow nor reap nor store away in barns, and yet your heavenly Father feeds them. Are you not more valuable than they? And which of you by worrying can add a single hour to his span of life?”
I believe this. First and foremost I believe that God will take care of me. He said he would.
But I also believe that there is a lot of truth in this verse just about life in general. Especially in America. If the housing market took a sudden dive and my properties lost half their value, would I be ok? Yes, I would. If they were all foreclosed on and I lost it all, would my family survive? Yes, we would.
Will there be food to eat and clothes to wear? Yes, there will be. Will there be opportunities for me to pick myself up off the dirty, dusty ground and start again? Yes.
I will acknowledge that I am a pretty lucky and blessed man. As a Christian living in America, there is so little to be afraid of. And sometimes that is enough to motivate me to keep trying new things. Not everybody has been given the privileges that I have and so I better not squander those opportunities.
What about you? Are there things that you are afraid of that are holding you back?