3 Common Reasons Why Real Estate Investments Fail

“It is not about the money, though that is nice to have. At the end of the day, it is really about matching the right buyer to the right seller. We are matchmakers—real estate matchmakers.” –Valerie Fitzgerald

Success in any type of business venture requires commitment, hard work and a degree of discipline. A business endeavor in real estate investment is no different.

Unfortunately, some individuals have marketed the real estate industry as a profitable and an easy way to make quick money. While your investments in real estate do pay off and indeed they can be lucrative, it takes diligence and patience on your part if you wish to see any significant results. After all, you cannot expect to simply put money into something and just sit around waiting for it to grow. It needs a direct action from you as well.

For this reason, quite a lot of individuals who were once so enthusiastic about the idea of dabbing into real estate by becoming an investor would become cynical at the thought of succeeding at it. It might have been that their ventures did not pay off (such as a unit in Serin Condo Tagaytay that has been sitting without offers for years) or that they did not exercise enough diligence and discipline to see their investments grow. In any case, having the right mindset would significantly help you in this endeavor in which you should not think of real estate as a get-rich quick scheme but more of a learning process that steers you towards monetary success.

In any case here are some of the common reasons why your real estate investment might have failed:

1. The risk was too great

Of course, any type of business venture regardless of its nature involves a degree of risk. It is an inherent aspect in every investment and of course, much like how the quote goes, the more risk involved, the more rewards you can expect. However, it is best if the risks you take are calculated. If it is too great, you might want to backtrack and check your options.

Have a better scope as well as leverage on the deals you make and do not quickly buy into something if the deal might cause you to plummet to bankruptcy should anything go amiss.

2. Insufficient education and research

Do not jump into the idea of real estate investments just because you think it is lucrative and profitable. It can be but of course, you require proper education and extensive research beforehand. You need to understand what you are doing and what is involved. Do not start purchasing properties thinking that they are going to be cash cows in the future.

Be effective in your investments and select the properties that make the most sense. Never stop learning and always do your research. In this time and age wherein information is readily at our disposal, you can read on countless articles on real estate online. There is absolutely no need to spend a lot just for education. After all, information has become so much more accessible since its democratization, so take advantage of it.

3. Inadequate Analysis

Apart from proper research and education, it is imperative to make a thorough analysis of your prospective real estate investments. Failing to gather enough data for your investments is a monumental risk that could cause you to spiral down to bankruptcy. You need to do the right math if you want to see any significant profit from it.

Sure, the future might be impossible to predict, but with a solid analysis, you are at least given a probably foresight into it, Remember, bad math makes for bad investments. So, you would do well to do not only your research but your analysis as well.