There are many reasons why a real estate investment might fail, but some of the most common ones include the following:
Lack of proper planning and research – Before investing in any type of property, it's important to do your homework and have a solid plan in place. This includes studying the market trends in your area, researching different properties, and getting a good idea of what you can afford.
Lack of capital – In order to make money in real estate, you need to have enough cash available to buy property upfront. If you don't have the money saved up yourself, you'll need to borrow it from somewhere else (e.g. a bank or private lender).
1. Lack of proper due diligence prior to investing. This can include not doing your homework on the property itself (e.g., checking zoning regulations, studying market trends, etc.), as well as the financial stability of the investment partner or company.
2. Taking on too much debt in order to finance the investment. When interest rates are high and/or there is a slow down in the housing market, it can be difficult to make money on a property—even if it's rented out at full price.
3. Poor management and/or oversight of the property.