“I don’t need to know.”
We’ve said it before and we’ll say it again—being a passive investor isn’t the same as being disengaged. A big mistake that passive real estate investors make is being uninformed or ignorant of not only their investments but to the facts and operations of this business as a whole.
Being an investor—even a passive investor—means investing time and effort into the success of your business. That doesn’t mean having all of the answers. It doesn’t mean worrying 24/7 about the state of your properties. It doesn’t mean going to every seminar or becoming a real estate guru. What it does mean is caring about what’s going on around you and not relying on other people to carry you through. While passive investors do rely on the expertise of others, they do best when they invest in their own ongoing education so that their growing knowledge can help them make the most informed decisions about their future.
“I have to know everything.”
When you feel the compulsion to know everything about every property, every deal, and every given situation, you’re bound to find yourself feeling overwhelmed and unable to come to any decision at all. This is what we call analysis paralysis.
When you’re overwhelmed by information or by a need to know everything, you’ll find yourself unable to move forward. Recognize that you don’t have to know it all. You don’t have to be sure. In investing, nothing is a sure thing. There will always be risk and the best you can do as a responsible passive investor is mitigate that risk.
“Who cares about ____, as long as I get paid.”
One of the most dangerous attitudes an investor can adopt is that of apathy. If you only care about making money and you don’t care about standards of service and quality, you’re going to find that you won’t be as successful as you hoped, especially in the long-term. Whether it’s a lack of caring about the quality of services provided, lack of care about the relationships you’re building with your property management team or turnkey partner, or an apathy concerning your own strategy and your reasons for investing in the first place, you’ll quickly find it destroys your potential.
If you’re not in real estate with a clear focus, you may struggle. If you don’t care about the people along the way, you’ll definitely struggle!
“Well, that’s good enough.”
Quality is an area of priority for successful passive real estate investors. They know that prioritizing great services for their residents and making repairs and renovations with the long-term in mind paves the road to their success not only now, but for years to come. It’s not about cutting corners to save a few dollars now. It’s about investing in their assets.
They’re not trying to be “good enough.” They want to stand out as the best of the best. Successful investors stand out. They rise above. Mediocre real estate investors are rarely the ones who do anything worthwhile.
“What if, what if, what if!?”
Worry kills opportunity. If you’re wrapped up in the what ifs and paralyzed by fear, you’re never going to get it done. To beat fear, you have to look at the reality. What do you really have to lose? What’s the true worst case scenario? If you’re honest with yourself, you can handle it if things go south.
All you can do is your best. Worry doesn’t add another day to your life or any more quality to the task at hand. It doesn’t help you do anything better. If anything, worry is a distraction. It throws your focus out of whack and ruins your nerve. You’ll miss great opportunities if you’re focused on fear and always looking at the negatives.
Instead, do your due diligence. Mitigate risk. Stay cautious, but don’t let fear of failure encompass your approach to investing in real estate.
“Nothing could possibly go wrong!”
On the opposite end of the spectrum is over-confidence. If you approach investing in real estate with blind trust, you’re setting yourself up for failure. Every investor must acknowledge the inherent risks that come with investing in anything. In real estate, it could be something as minute as a need for repairs on a property or it could be a problem as big as dealing with an eviction. It could be a lemon property or a natural disaster.
There’s always risk. Believing that nothing could ever go wrong leads to investors who don’t prepare for the worst. The key here is preparation. You likely will never have to deal with some of the worst case scenarios in passive real estate investment.
When you prepare for them anyway, you’re never caught off guard, no matter how big or how small the problem.
If you break out of these negative mindsets and set your sights on what matters—integrity, purpose, honesty, and engagement—you’ll be on the road to success.