We’ve all heard of “buyer’s remorse,” but what is it exactly?
When making a significant buying decision, people often refer to buyer’s remorse, the feeling you get after (or sometimes immediately before) making the deal. It can happen when buying a home, a car, or even making a business decision. A Zillow study reported 75% of homebuyers surveyed regretted their home purchase. (Zillow.com)
Can buyer’s remorse also affect property investors?
Yes! The feeling of guilt is extremely common, even amongst seasoned investors. Any investment is a considerable expense, and not recognizing that fact could make you a more erratic and less stable investor. So yes, buyer’s remorse happens, and it’s not always bad.
How can you avoid feeling bad?
1. Weigh up your purchase very carefully.
Using partners or investment strategists like Regalway Homes is the best way to see a purchase without your added emotion. We can assess your finances, your goals, and your other risks to make sure that your investment is right for your needs and ideally timed.
2. Put the cost into perspective by equating it to man-hours.
Let me set up an example: imagine you are considering two homes that you plan on renting out. One is CA$25,000 more than the other. They have similar square footage and bedrooms/ bathrooms and are in the same neighbourhood. The main difference is the state of the homes. One will need significant work. Now, add the labour estimates and the lost rental income, AND your own time in hours (we can help you estimate all of these costs) plus a 2% add-on for unexpected costs. Now, which one is the better value?
3. Understand your own character
Some people are risk takers while others are risk-averse. Just because investing in property makes sense to you doesn’t mean it’s going to be easy. If you are risk-averse - or you don’t have much experience with taking financial risks - it can be very valuable (emotionally and financially) to have a partner that will guide you through the process and ensure you make the best decision FOR YOU!
We have worked with clients after they pulled out of an investment property and lost a significant deposit. Save yourself from this situation by calling us before you start considering properties.
4. Don't Dwell.
Once you’ve made your purchase, look forward to the next steps. Focus on fixing up the property, getting renters in the door, and deciding whether you should keep the property for the long term or sell it quickly. Don’t waste energy talking about your remorse, or worrying about past decisions as this just feeds the feeling of anxiety.
If you feel like you made a poor decision, contact us and we can help you lay out the next steps or help you to see how the property can best be used. Want to set up a free consultation? You can do that by choosing the best time on our calendar below.