Fears

This week in our class we have learned about how our fears can prevent us from achieving our goals and not allow us to follow our calling.  It also can cause us to not reach our star or not use our stepping stones.

We were asked to address our fears.  I have a lot of fears of being an entrepreneur.  For our rental property business it seems that one fear leads into the other and the next and the next.  So the first fear, while it is minor and in the long run not that significant is that we don't have a tenant or that our tenant doesn't pay the rent.  Second, if the tenant misses several months, how will we pay the mortgage payment.  Then, if we don't pay the mortgage payment, will we lose the rental property via foreclosure? If we lose the property, how will that affect our credit?  Will we be able to purchase additional properties in the future or will that ruin our credit permanently?  Finally, if we lose multiple tenants, multiple months of rent and ultimately multiple houses to foreclosure, how will we meet our personal monthly obligations?  Will we end up having to file bankruptcy?  How will my family respond to a bankruptcy, will my marriage survive?  Will we lose our own home and be homeless?

Another set of fears is having more repairs that need to be done than money that is available.  If there is a major repair that needs to be done, will we be able to afford to do it?  Or will it be too much and we will be taking a loss on our rental property business?  If that is the case, how will we handle it? How will it affect our personal lives, especially if I have quit my part-time job, my husband has quit his job and am relying only on this for our income?

Finally, what will happen if the property catches on fire and is completely destroyed?  Again, how we will pay the mortgage on the property if there is no rental income?

In going through this exercise, it seemed that the majority of my fears were mitigated by savings and budgeting.  If we begin now to save one, two, three month's and eventually a year's worth of rental income/expenses, then when a tenant moves out, it will be okay if we don't get paid rent for one or two or three months as we have the money in reserve until we get a new tenant.  We need to make sure as we are budgeting and spending for repairs and expenses on the rental properties that we do not use every bit of money each month but put aside a reserve for these cases.  The other portion of it, is making sure that personally we are getting out of debt, saving for expenses instead of using debt to purchase things, and living within our means.  If we are living within our means without the rental property income and using the rental property income to purchase additional rental properties (reinvest into the business).  Then we will not have to worry about the majority of these fears.  Eventually, we will get to a point where the rental property is generating enough cash flow for my husband to quit his full time job and we can live covering all of our expenses and the rental properties expenses and continue to build the business.  Then we will be financially self-reliant.