Here is a snapshot of what PropertyValue enews thought were the four easiest ways to lose money in real estate. We agree, and there are lots of more ways to do it, and lots of ways to avoid it!

  1. Choosing poor growth locations
  2. Selling too soon
  3. Failing to accurately forecast income vs. expenses
  4. Embarking on a bad project or completing it poorly

“The typical scenario goes like this:

  • An investor buys in a bad growth location
  • There are more expenses than they anticipated
  • They grow impatient accruing losses each year
  • So they decide to sell before any growth happens
  • But they renovate first spending $20,000 which adds only $15,000 “

“Sometimes it’s a good idea to sell and cut your losses, especially if you’re holding a heavy cash-flow killer or if you’ve picked a terrible growth location. But other times, a little patience might make all the difference. You’re less likely to second-guess your decision if you get some good growth early on.”