Mistakes are humane thing that sometimes cannot be avoided. However, mistakes are there for you to learn. Thus, you know how to avoid making the same mistakes.
In property business, making mistakes sometime is inevitable. However, smart investors always try hard to know more about them and find a way to avoid them. There are technical mistakes, but there are also mistakes caused by emotional feeling.
Some people argue that those kind of mistakes are made mostly female investors. However, that is not true at all. Sure women are more vulnerable when it comes to emotion. However, men can also make the same mistakes.
Several mistakes caused by emotional feeling during your investing
Property investing is all about number and fact. Involving emotion in this business won’t do you any good. It could be worse if your emotion overrule your rational. However, sometimes human is so dependent on intuition and gut feeling. However, it often leads to poor-decision making when it is used in property investing and here are some examples of the mistakes caused by emotional feeling:
– First example of the mistakes is overpay for a property. When you are swayed by the sentiment mixed with too much optimism, it is easier for you to make rash decision and overpay a property you are going to buy. The chance is, you need more money to pay so you borrow more than what you can actually afford. Being in debt is tolerable but if it can be avoided then you should do it not to get it worse. Make sure to plan a strategy before buying any property and evaluate your budget thoroughly. Set a budget you are willing to pay for a property.
– Another common mistakes caused by emotional state is fear. There are various types of fear. Some people are fear of missing out opportunity in the market, others are fear of making mistakes itself. Fear is a good thing to some extent because then you are willing to count the risk and consider the weight of the investment. However, too much fear will only cause poor-decision making resulted in being impatience. Remember that there will always be another opportunity even if you missed one.
– Another example of mistake driven by emotional feeling is overbidding at auction. One of the most common places for investors to gather around is auction. It is where you will be in a prime environment with other desperate buyers. It is easy to get riled up and emotional resulted in overbidding. To avoid this mistake, make sure to set your limit beforehand.
– Another mistake in property investing driven by emotional feeling is attachment. When you are emotionally attach to something, it can cloud your judgment. If you think you are incapable of doing your task detachedly, you can seek independent advice. Thus, you will be able to plan objective strategy from unbiased point of view. This seems like a hassle to do but it is better than making costly mistakes.