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In the real estate market, it’s easy for plans to go awry. Sometimes it’s our own negligence or lack of knowledge, sometimes its circumstances we can’t predict.
I always urge new investors to learn, learn and learn some more before taking the plunge into their first property venture. But it’s also just as important to know what to do if things go south: we need to know how to recover from failure too.
Damage control using expert help
The most devastating outcome of a failed investment is being burdened with bad debt. If you’ve found yourself with a financial weight on your shoulders, the priority is receiving expert help as quickly as possible. A financial adviser can help you find strategies to manage the repayments, consolidate the debt or refinance to give you some breathing space.
Employing a tax accountant can also help you get the most out of your tax deductions and an experienced investor may even be able to find a strategy to turn the debt around, based on your other assets.
Regroup and reset
It’s a challenge to overcome the mental obstacle of fear after an asset fails, regardless of the reason. It can leave you feeling disheartened and burdened – I know, because I’ve been there. But letting mistakes, failures or bad luck stop you from continuing on your path to financial freedom means you’ll never move past your current position.
All entrepreneurs experience failure to some degree, but the result should never be to just give up.
Did you know that Steve Jobs had two disastrous business ventures before he found success? The first of which failed so miserably, he was kicked out of the company he co-founded: Apple computers! Eventually he found his way back to Apple and became the creator of mobile technology that has changed the way we all live forever.
Learning from a negative experience is just another step towards personal growth as an investor. Deciding that the injury is too great and choosing to sit on the sidelines watching the game won’t get you anywhere! Pluck up your courage, work out what went wrong, and get ready to play again. I guarantee you’ll be a smarter and savvier investor on the other side of adversity.
Don’t make the same mistake twice
The upside to running into problems in your investment ventures is that you will gain first-hand experience, and you’ll know how to avoid the same mistake again.
I’ve met people who’ve experienced struggling or failed investments for every kind of reason, from unexpected personal circumstances to foregoing an inspection with disastrous results. All of those mistakes, even the ones they didn’t see coming, could likely have been avoided with proper planning and due diligence. Ask yourself:
Only consider purchasing if it’s financially safe, not just doable – especially during those times when the market slumps or interest rates increase.
An adequate buffer is essential to absorb unexpected expenses or repayments during periods when your property is vacant.
Any property you consider must tick all the boxes for location, rental desirability, future growth and capital potential.
Having an expert on your side can help you with strategies to lower your risk profile, from qualified property managers to experienced mentors (the latter have often made all the mistakes before you, so they know what they’re talking about!)
If you know what you’re aiming for, you’ll make smarter, more specific choices rather than grabbing every opportunity that comes by. A long-term strategy will keep you on the right path.
Dusting yourself off from failure and continuing on your path is such an important part of your journey as an investor.
Steve Jobs left us with an incredible insight into his own hard-won success with these words: “I’m convinced that about half of what separates successful entrepreneurs from the non-successful ones is pure perseverance.”
