The success stories of people who made comfortable lives for themselves with nothing more than their real estate rentals are too many to count, but stories about failures aren’t far behind.
When it comes to property investments, it is hard work and putting in the effort can see great returns.
At YNM, we are there to help you grow your portfolio, assist you with property management as well as offer the best advice and guidance.
We have compiled a short list of the reasons why some property investment decisions fail.
When you invest in a property with the goal of having a tenant rent it – whether for residential or commercial purposes – you should expect that you will have to spend some cash throughout the contract to ensure that your property stays in top shape.
Those pipes aren’t going to stay pristine forever, neither will the heating system. Every feature of your property will give in to wear, tear, damage, or total destruction one of these days and it’s not a matter of ifbut of when. Obviously, your tenants are not going to be responsible for the repairs.
The main reason why many people fail at property investments is because they fail to plan ahead. When those costly expenses start rearing their heads, owners often don’t have the financial flexibility required to pay for upgrades and repairs. The quick fix that comes to mind would be to take out a sum from what the property earns them and use that to resolve whatever needs fixing, but this will prove to be a vicious cycle sooner or later.
Dipping into those supposed profits will keep happening in the future and you will soon find yourself out of profits to spend. By that time, where do you intend to take out money for repairs?
But there are ways to avoid this property trap,
Always look into the future when it comes to your property investment. Perform the necessary upgrades and don’t cheap out on maintenance checks. This could just save you from having your investment fall into total destruction.
Even if you don’t see any expenses in the future, it would be best if you set aside a fund for emergency purposes. This will serve as the resource for you to use if and when those damages happen.
If there are people in your circle who would be willing to answer for repairs in the meantime while you don’t have the financial flexibility, make sure you keep them close. Inform them that you’re currently in a sticky money situation and that you might need their aid one of these days.