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2 sure-fire ways to avoid investment over-analysis

Research is obviously necessary in order to confidently enter and explore your potential to achieve the right balance of income and growth, within the property investment arena.

However, as much as a thorough knowledge of the market in which you intend to acquire your investment is essential, research can quickly become your Achilles Heel.

People who are perhaps less confident in their own decision making capacity, will often fall victim to what we in the industry refer to as paralysis by analysis; or the perennial problem of research.

These would-be investors get into a never-ending rut of exploring every little nook and cranny of property markets in a bid to uncover what makes them tick. They believe a time will eventually come when they have enough knowledge under their belts to feel completely comfortable buying an investment property and, inevitably, that point never eventuates.

The problem is, real estate is a changing market, within a changing economic environment and because it’s a bit of a moving target, you really need to make friends with the fact that you’re never actually going to be 100% certain that you’ve accounted for every variable and you know all there is to know.

You must do two things in order to ensure you avoid over-analysis of the facts and figures, at the expense of any real action – because action is what creates a result after all.

1. Embrace the unknown.

Rather than fearing that which you don’t know – the variables in the equation – strive to embrace whatever fear or concern you have regarding your property investment journey, and accept that it is quite normal to feel this way.

Let’s face it – a certain element of fear can be healthy. In fact, if you don’t have much concern about investing large sums of money then you should probably be worried, because that’s when mistakes happen.

A complete lack of fear can make people become over-confident, or maybe a little bit too cocky. Quite often it is these investors we see over-extend themselves from a risk perspective. So fear is actually normal and healthy.

2. Be confident in your decision-making capacity.

Having said that, you do need to have a degree of confidence in your decision-making skills if you want to advance in the property investment game. Try not to second guess yourself, instead seeking a healthy balance between a well rounded understanding of your own property investment goals and strategy and good old fashioned gut instinct!

Because let’s face it, at some stage you’re just going to have to take the plunge. While you don’t want to invest without conducting thorough and sound research or when you’re scared out of your wits, chances are if you’ve already spent six months or a year crunching the numbers and taking stock of all possible scenarios, it’s highly unlikely that another six months or a year is really going to help you that much more.

There is always going to be some element of doubt. To start your property investment journey you will have to take a deep breath, embrace the doubt and take the plunge.

And remember, property investment is not about emotion, it’s about numbers, so always think with your head and not your heart!

For more information on how you can profit from investing in Australia’s residential real estate sector by establishing clear investment goals and strategies, click here to contact us, or subscribe to receive regular post updates and industry insights.

Stuart Wemyss is a chartered accountant and founder of Property Tycoon Finance. Email: wealth@propertytycoonfinance.com.au

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