5 Reasons: Why Many Real Estate Investors Fail?
Real estate investment is mouthwatering for many wannabe investors. But it’s also important to dig further into the nooks and crannies to understand things better so that it helps them avoid some mistakes and get most out of it.
Being a part of real estate development company in Dubai is undoubtedly lucrative where wealth multiplies exponentially. But if it’s such a worthy industry to multiply your wealth, why many people end up losing money here. As per stats, 50% sell-up in the first 5-years and 92% of those never get past their second property. There could be hundreds of reason behind why some property investors fail and are unable to get profits out of their real estate investment. But to narrow it down, here’re a few major reasons mentioned for that. So let’s dive in;
Didn’t Learn More About it
Do you still think that HGTV shows the real-life investment property deals? They might show a ton of useless stuff but what they don’t show is how you can shop your deal to lenders to fund the deal. These TV shows won’t show how to market your property beyond sticking a realtor’s sign and how to maximize the profit as much as possible?
Therefore, make sure you spend enough time to get educated on sourcing private money, learning marketing systems as well as strategies to ensure that you make the most on every deal.
Paying too Much for Real Estate Education
Honestly, you don’t have to spend $50K or even $10K to learn real estate investment since there’re plenty of resources available online for free. It’s not like some aren’t worth it, but before investing, make sure you verify that these gurus are legit. And if you want to learn, make sure you find yourself a quality mentor you can work with. If you bring them value, you can learn much more than you ever could from an online guru.
Just Theoretical Learning and no Action
Your money would be better suited for the charity if you’re investing so much on learning but not taking any action. Keep in mind! Taking massive amounts of actions is the only thing that will change your life. If you’re stuck into some psychological barrier that stops you from taking actions, just read the book ‘Awaken the Giant Within’ by Tony Robbins. It’ll help you overcome the limiting believes that are holding you back from growing.
Relying on Traditional Financing Methods Only
What people normally do? They use banks to finance the very first deal paying 20% down to acquire commercial property for rent in Dubai. Next Up, they gather money from rental income and repeat the process. This way, you get stuck with so many legal stuff and bank loans. Instead, it’s better to get along with the private money lender.
These are the people with a lot of money in their banks but have no idea what to do with this. So just find the right private money lender to finance your first investment and things will turn up less hassle for you in the long run.
Timing the Market
While timing the market, many investors think they’re heading on for something strategic. With this, they’re just willing to hunt a new hotspot. What investors do? They just buy in the location due to upcoming projects in that areas thinking that it’ll turn the poor location into high-in-demand. Eventually, it’ll benefit them as the value of the property will go up.
With that impractical approach, they end up investing in a property that’s never going to outperform. Smart investors buy the next property when the finances allow them. Worrying too much about market timing is going to get you into a big loss. In fact, they also realize that the right location will do 80% of the heavy lifting of the property’s performance. Keeping that in mind, they invest in that location, they can hold in the long term.