Why Real Estate Investors Fail

When looking at examples of successful real estate investors and contrasting them with unsolicited advice I hear from people about not investing in real estate, toilets break. I often wonder: why do real estate investors fail?

After researching the subject, it turns out that most real estate investors fail due to a lack of money or not treating their investing activities as a business.

If you run out of money, bad things happen. For example, you could get properties foreclosed on; liens can get filed on your properties if you do not pay your contractors; you basically become stuck unless you can inject capital into the business.

Not enough capitalisation

Most successful businesses have an area they define as their core competency. They try to focus most of their efforts on growing the business that fits in that competency. I often see investors fail because they move from one strategy to another.

Not treating Real Estate Investing Like a Business

Real estate investing is a semi-passive investment, sure. However, there are things you need to do to keep up with the maintenance of your properties. If you let some maintenance items start to slip, it can be a cascading effect.

Leaving on “Auto-Pilot”

Investors who do not stick to a lease are just inviting in bad experiences and rarely do anything good happen by being soft around enforcing a lease. Some of these bad experiences will cost money for the investor, and others will cause headaches.

Not Sticking to the Lease