Is overanalyzing killing your real estate investment business?
There’s nothing wrong with trying to be careful. Believe us, we believe in looking at the numbers, carefully weighing the data, and making good, evidence-based decisions. It’s only smart to go in objectively.
That said, there’s a little something called analysis paralysis that can psyche out the best of us. It can cause you to lose out on deals, delay good decisions, and miss out on great opportunities. As they say: you miss 100% of the shots you never take.
Analysis Paralysis is Real
This phenomenon plagues decision makers in just about every field. It was psychologist Barry Schwartz who coined the phrase “paradox of choice,” in describing his findings that though increased choice objectively allows us to achieve better results, it also greatly increases our anxiety, dissatisfaction, indecision, and mental paralysis.
More information and unlimited access to that information (thank you, Internet), while empowering, means that instead of just being empowered to make better, more informed choices, we’re also more afraid of making the wrong choices.
That fear keeps holding us back.
We’re spinning our wheels.
Too much choice just plain stresses us out.
So as real estate investors—people faced with choices every day: locations, financing, partners, properties, tenants, managers, fixtures, contractors, deals, offers, companies, strategies—how do we overcome paralysis analysis and stop ourselves from missing out on opportunities?
1. Set deadlines for yourself.
Sometimes, there are already deadlines in place for us, but sometimes, there aren’t. We let opportunities pass us by because we aren’t locked into a hard deadline. Make a deadline. Force yourself into making a decision and create accountability for yourself.
2. Limit the information you receive...and need.
Information overload is a huge source of analysis paralysis. You don’t need all of the information. Limit your intake. Maybe it’s as simple as closing a few tabs in your web browser at one time. Maybe it’s practicing focusing on one task at a time, or being more present in your conversations with other people. Remember: you don’t have to do everything at once.
Also remember that you don’t need as much information as you think you do to make most decisions. If you keep waiting for “all the information” and every detail to make every decision, you’ll never makeany decision. What details really matter?
3. Talk it out.
Keeping everything in your head can turn into an endless cycle of back and forth. Talk it out. Even if the other person isn’t a professional who can offer you real advice, just the act of talking out loud can help organize your thoughts.
4. Organize important decisions.
Try to make big decisions early in the day rather than later. Each day, prioritize what needs to get done, what decisions need to be made, and what’s actually important. What decisions matter, and what factors are actually important in making those decisions?
If you’re having trouble deciding what’s important and what isn’t, just ask yourself:
- How much will this impact my investments a year from now?
- What’s the worst thing that can happen? (Hint: it’s usually never as bad as we think!)
5. Keep your goals clear.
Why are you making these decisions in the first place? What are they accomplishing for your real estate goals? Decisions become easier when you have a constant, clear vision for yourself and your investment goals. Keep those goals at the front of your mind. They’ll help guide you.
6. Accept risk.
Analysis paralysis often springs up from a fear of being wrong. A fear of messing up. In real estate investment, there’s always risk. We’re going to make mistakes. We’re going to be wrong sometimes. Calculated risk is part of the game. The sooner we accept that and let go of the need to be right and perfect all the time, the sooner we can take action and make progress.
Remember, being wrong, making mistakes—these are not failures. These are opportunities to grow and learn, and to become better, stronger, greater real estate investors than we were when we started.