What are the cases that cause investors to lose money when buying real estate?

Owning real estate has long been a goal of many people.  And undeniably the huge profits that real estate has brought to investors.  However, there is no investment channel without risks.

In his book How to Make Money in Stocks, Mr. William O'Neil, an American businessman, and stockbroker said, if asked whether to invest in real estate, the answer is: Yes, but in the right place, at the right time.

What cause Losing Money in Real Estate Investing?

Writing in his book, Mr. William O'Neil said that he firmly believes that everyone should work with the goal of owning a house, building a savings account and investing in common stocks or a mutual fund that invests in progressive stocks.  Owning a house used to be a goal for most people.  The ability to borrow long-term bank loans at low interest rates has provided the leverage that allows Americans to make big investments in real estate possible.

Real estate is also known as a well-known investment channel because it is easy to understand and can bring huge returns.

However, not all cases are good, people can and are still losing with real estate due to unfavorable circumstances.  Here are 4 situations which real estate investors can lose money.

Firstly, they make bad choices right from the start when buying a house in an area that's either falling in value or isn't going up or has had a drop in price.

Secondly, they buy at overpriced prices after years of market booms and just before a major economic correction or in the geographic area in which they own the property.  This can happen if there is a major disruption in industry such as a shutdown of a major producer in the local economy.

What cause Losing Money in Real Estate Investing?

Thirdly, they were not able to accept large property payments or reduce their income due to job loss or rental fee increases if they are in rented housing.

Fourthly, they are victims of fire, flood, earthquake, ... or other natural disasters.

According to William O'Neil, your capital and skills are often best developed when you focus on buying and selling the right stocks of high-quality growth stocks, rather than scattering efforts over countless other investment options that are riskier or less promising.  

For any investment, do the necessary research before you make a decision.  Remember that there is no such thing as an investment without a degree of risk.  Don't let anyone fool you into having such things.


Copyright © sunetmost.com