How to Make it Through a Rough Real Estate Buy
Odds are that you have suffered from buyer’s remorse at some point in your life. When it’s something like an expensive pair of sneakers or a new phone, it’s not so hard to get over. A house or piece of property on the other hand, well those are purchases that can be pretty tough to recover from.
If you have made a mistake in a real estate purchase, you still have options. Some mistakes are fixable. And for those that are not, it doesn’t have to mean the end of the road for your real estate career. Here are a few tips to dealing with a rough real estate buy.
Take Time to Analyze and Face the Reality of the Situation
Before you make any decisions you have to determine exactly what went wrong. Maybe you purchased a rental property and it turns out that you cannot get the rent you had expected. Maybe you purchased a flip property and the renovation went off the rails and is now completely off budget and your comfort zone. Or maybe interest rates spiked and you can no longer afford your monthly mortgage payment. Whatever the situation, you need to figure out how exactly you got there before you can determine how to fix it.
Once you have determined what the situation really is it is time to be really honest. This means getting your head out of the sand and figuring out exactly how much value has been lost, and how much all of this has accumulated in debt. Put all the numbers on paper, this means that you won’t be able to hide from them. This is also a good idea because once you see them in front of you, a potential solution may present itself. For example, if the property has gone down in value but it still cash flows from month to month, it may very well be worth hanging on to. This is because the market could change and the value could rise again. That said, the opposite could also be true. You will really need to assess market conditions and your own financial situation before you decide to hold or sell.
Make a Game Plan
How much money are you trying to make? Over what kind of time period? If you do not have a solid plan it can be difficult to know what kind of property to purchase. For instance, if you are looking for a high monthly income, a student rental where you rent by the bedroom could be the perfect choice for you. If you are looking to fund a wedding How to Make it Through a Rough Real Estate Buyer you want a down payment for a forever home, a flip property might be a better investment.
Accept What has to Happen – Whatever it is
If there is one thing you definitely do not want to do is throw good money after bad. This means that if you really can’t get your property to cash flow, or if you have taken on more debt than you can really handle, you may just have to sell it and move on. As disappointing and discouraging as this can be, the reality is that trying to hold on to something that’s weighing you down will cause you to suffer financially and emotionally. Rather than allowing that to happen, get rid of it, and try to recover on the next purchase. Whatever you do, don’t just sit around waiting for your luck to change – that is never a good strategy. Take control, learn from your mistakes, and resolve to do better next time.