9 Reasons Why Property Investors Fail
There are many reasons why investment fail. The common ones are as below:
Property Investment Treated as Stock Investment
Stock, shares or equity investment is different from property investment. Investors buy stocks to either earn dividends or to make profit out from the appreciation in value of the stocks. Profits from stocks are very much dependent on the performance of the company, or the general economy situation and the capability of the management team. Of course, when we invest in property we do want the property to appreciate in value. But this is not the only way to make money from an investment property. When the price of the property do not appreciate this do not equal to a bad investment. Many people gave up as soon as they see the value stagnant. In fact, the more savvy investors also look at rental returns, possible cash flows, wealth accumulation and even ROI through property investment.
This is a clear advantage of investing in property. This is the only known investment that banks are allowing to finance. While this is good news for investors, however some investors may be tempted to over leverage with the easy credit during a bull market. Many were forced to sell their properties, and usually at a huge discount when the market took a turn.
Lack of Clear Objectives
This is common among many investors. Many would only be concerned about capital appreciation. What about cash flow? What about wealth accumulation and other objectives that is applicable and suit individual's situation and risk appetite?
Lack of Knowledge
Well, it is not uncommon to see herd buying instinct. While this is not totally wrong, it is better to understand at least the demand and supply of the type of property before investing in them.
Inability to identify priorities
Again a common mistakes here. Many are faced with too many priorities and got confused, and hesitated and never really got started.
Lack of Persistence
Well like all investment, investment in property do also carry certain degree of risk. Like all market the property market is also subject to its up and down cycles. Many panic when the market turn bearish, and are eager to sell their property and made a hasty retreat as a result without understanding the situation and careful consideration. Many are even willing to exit even when there is financial loss despite the availability of other options.
Lack of Clear Plan
Making money from property also needs careful planning to avoid unnecessary cost and downtime. What is the market situation and the market rate? How am I going to maximize the income productivity from the property?
Lack of Support
Do you have the time and contact necessary to manage your property? Did you also choose the right partner to work with?
Failure to Manage your Time
Many would think that it is easy to manage or to rent out the property on their own. However, the time spent and sometimes additional stress encountered would not be worth the money paid for a professional to manage it for you.