Paralysis by Analysis!

I was speaking with a friend who has decided to dip her toe into the property investment market for the first time. She has been looking to invest for around 18 months and is no closer to buying than when she first started. She said she had almost bought a couple of properties, however each time had backed away from making a decision for one reason or another: if it wasn’t the impact of the GFC on the local housing market, it was the potential impact of the mining tax on consumer confidence. These reasons, coupled with ‘expert’ advice from friends, relatives and colleagues (many of whom don’t own investment properties) led to information overload.
She was a “deer in the headlights”. There was too much choice, too much input from others and just too much information to absorb. She was suffering from paralysis by analysis.
While information and data can arm you with critical information, allowing you to purchase your investment property in the right location with the right features at the right price, it’s also possible to become overwhelmed and paralysed by thoughts such as “if I don’t get it right, I’ll lose a lot of money” or “buy a dud”.
The answer is filtering. Right from the start of the buying process you need to filter all Real Estate Personal Property Addendum the information you receive, including where it has come from and who gave it to you.
Ask yourself: is this person qualified to give me advice? Does this article relate to my situation? What time period is this information from?
I’m not for one minute suggesting that you don’t need to keep your eyes and ears open to relevant information that will help you to choose the best investment property for your circumstances. The key word is relevance. If you don’t filter out the gossip, ill informed and non-relevant information, it’s easy to become overwhelmed and frightened of investing.
It’s not about rushing into a big decision. It’s more about not allowing yourself to become overwhelmed by too much irrelevant information. There’s a very real consequence to delaying the purchase of your investment property. For every week, month and year that goes by you lose the opportunity to accumulate important capital growth in your investment portfolio.
If you start splitting hairs between a fantastic investment property and a great investment property, you may miss the opportunity altogether and again delay earning capital growth.
Here are some tips for filtering information to best help you make the right property investment decision:
1. Who is providing the information? If it’s friends or family, do they have a successful investment property portfolio?
2. What is this person’s motive for giving you advice? Sometimes people transmit their fears onto others.
3. Build a rock solid team of people who are experts in the field and have solid credentials: accountants, mortgage brokers, buyers’ advocates. They’re likely to be more reliable information sources than your Uncle Jerry.
4. Always take advice from people that know more than you do. For example, if you have a $1.2 million dollar property portfolio, the rule of thumb is not to take advice from anyone with a folio worth less than that.
5. If reading a news article, identify the source, question if the article is relevant to your situation, and determine if the story has been written to generate fear or create sensationalism to generate interest and readership.
6. Be clear on the risk that is stopping you from acting. What is the actual dollars and cents cost of choosing Sell My House Fast For Cash one suburb over another? One property over another? Often your perceived risk isn’t as high as you think.
7. Understand your goals and start with the end in mind. This will help you set clear milestones and understand what type of investment property you should be purchasing. It’s easier to filter or deflect information if you understand that it doesn’t match your plan.
8. Lastly assess all relevant information and advice, and do away with information that will only cloud your decision-making process. The goal is to make the best possible decision for your personal circumstances – without suffering from paralysis by analysis.

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