One of the hardest things to do for investors, both old and new, is to leave emotions out of investing. Most people that work for themselves are very competitive and view their business as a personal scoreboard. There is nothing wrong with being competitive, but at some point you need to realize that you are looking to buy a house and not win a bid over fellow investors. Your emotions can impact what house you buy, what you pay for it, who you work with and who you rent to. If you make a mistake in any one of these four areas, your business can suffer a significant setback. It is important for real estate investors to check their emotions at the door. It is better to rely on hard data than emotional distress.
You are never guaranteed a property, even if you were the first one to find it and conducted sufficient due diligence. Having an affinity for a respective property and seeing value in the current situation does not mean you have to do whatever it takes to acquire it. At some point, the deal may no longer make sense and it will be time to let it go. This is not always the easiest thing to do, but it must be done if you want to build a profitable portfolio.
The same can be said about the people you surround yourself with. You may have established a friendship with a new carpenter or contractor, but that doesn’t mean you should put them on your next job. If you hire the wrong person, you cost yourself time and money. Leave friendship and emotional feelings aside if they are not qualified to do the job. There will always be other opportunities down the road in which they can work with you.
Many landlords have a tendency to become attached to prospective renters during the application process. For whatever reason, some tenants are more liked than others. There are times when they will practically beg you for acceptance because of their current situation. However, now is not the time to let emotions dictate your decisions. Unless the application makes sense, you may be opening yourself up for twelve difficult months of headaches.
If you are an emotional person by nature, it is best you take time to really consider your choices. Give yourself 15 minutes after you get bad news, take a walk or call someone you trust before you make a decision that can alter your business. It is important to remember your data and the numbers available. Ultimately, this information should drive your decision making efforts. Emotion and gut instincts can help you in some instances, but for the most part, they will get you in trouble.
The decisions you make when you are heated or not in the best frame of mind count the same as decisions you languish over for days. Emotional decisions can have a huge impact on your bottom line and you need to do everything in your power to resist making them without a rational mindset.