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Why Many Real Estate Investors & Investments Fail.

Real estate is basically the buying, selling and rental of land and landed properties in layman’s term.

It is a very lucrative business that provides many opportunities, as investing in the real estate business is a great method for making money and building wealth. It is a relatively easy business to start as anyone can start with no to very little money depending on where you aim to invest at.

It requires both time and proper time management in learning new approaches and implementing them.

Real estate business takes time and perseverance, and its rewards can be very great, it is not a “get rich quick” business, contrary to what many business experts try to promote and this is where most investors actually miss it.

If real estate is as good an investment as it is designed to be, why do so many property investors fail, why do 50% sell up in the first 5-10 years and why do 92% of those who stay in the game never get past having their second property? Wouldn’t it be nice if someone told you the brutal truth about exactly why many real estate investors fail?

According to a survey by Inc.com, it’s been researched and published that about 96% of businesses go out of business within the first 10 years and over half fold up their tent by the end of the first year, why?

Although there are a lot of reasons asides ineffective time management as stated earlier on why so many investors don’t achieve their goals, today we will highlight the most common mistakes which many make and how to best avoid avoided.


1. Poor Investment Education and Inadequate Sustainability Plan:

Most investors which often are inadequately educated about what makes a good investment or what can turn out to be a good one as they frequently chase cash flow rather than capital growth.

What I mean is, they just one day “decide” to become investors and generally operate by speculations, as we say in Nigeria “dem say”. For example, they buy a property in a particular location because they heard that it’s soon going to go boom, mostly it’s because these locations are supposedly on the peak of big things; and the problem is that these “big thing” either never materializes or is only short termed and before they know it they’re left with a property that doesn’t increase in value or worse still, one they can’t get even get a tenant for.

They fail to make research, plan and devise a proper strategy on where, what type of investments to make and when to put in the effort for a good investment.

*An example of a short-termed boom is the new trend of certain developers erecting substandard but good looking residential apartments with low life span as these properties only survive the first few years of their agreement with investors leaving investors with a bad property after such duration. Professional investors recognize that there is a big difference between investment grade properties (ones that will outperform in the long term) and investment stock which has been built by developers to sell to investors and generally underperforms long term because it’s either a bad type of property or just in the wrong location.

2. Not focusing on what’s important:

Confucius once said “One who chases two rabbits catches neither. When real estate investors focus on doing too many things, they end up not doing well; what I mean is that, sometimes their early successes often become the biggest hindrance to their future focus.

For example, an investor having some big early wins would attract lots of people wanted to do business with, the question however is, “are the propositions aligned to the core to the business he had planned?

Don’t get me wrong, venturing or investing in things is a great thing but the idea is sticking with one and building from there till it attains stronger grounds before taking another up another is the goal; but till then focus on your priorities.

3. Learning about Real Estate and not the business itself:

A lot of investors forget that they are actually venturing into a business and think that to be successful, all they need to do is understand things related to real estate. Therefore, instead of concentrating and improving on relevant technique and business skills such as communication, negotiation, marketing etc., they rather focus on the property. One can actually understand what you do, but if you can’t market or sell yourself, you’ll never make money as you hoped to make.

Real estate investors who don’t have the right business skill set are far more likely to lose out than their fellow counterparts who both enrich their product knowledge and learn various technicality for building the business.

4. Area of preferred investment:

From real estate investment seminars to real estate investment adverts seen on social media and TV, one would think that residentials are the only property type available.

Further supporting the first point, due to poor researching, most investors go into the most popular aspect of real estate (Residential) which is almost saturated rather than explore areas with less competition and more opportunities (Commercial).

Most people go for the residential because they don’t understand that residential real estate has just a high demand but is a relatively low yield investment when compared to its commercial counterpart. In layman terms, “has a limited profit potential and heavy time commitment”. Don’t get us wrong again, one can venture into the residential option with a proper plan, building a name and exceeding expectations, but for an amateur investor who just went in based on the news of a high demand may not just suffer bad deals, but give up as a result of the fear for a continued loss.

5. Poor maintenance culture:

There is a relatively common theme in real estate called Set and Forget, which is setting up a property (may be newly constructed or renovated from a particular apartment type to another) and leaving it as time takes its toll on it.

To many investors, this is supposedly being a sound investment strategy as it would grow in value year after year.

This kind of approach is as regards to the popular belief that “Real estate/Land doesn’t depreciate”. Yes, it doesn’t, but that property on it would and when it does, the loss would be great.

This is not a strategy and can be considered a very big mistake as all properties will need some attention over the many years as at some time, you’ll need to upgrade some facilities to help retain value and attract the best tenants.  Smart investors regularly review their property portfolio’s performance to understand which ones need attention as neglected properties are not the ones you definitely want in your portfolio.


As it’s said the best investment on earth is earth and real estate is considered not only the safest investment but a highly progressive one at that. Invest today and begin your journey to a sustainable and financially free life, but if on the contrary, you want to invest and don’t know what, where and even how to go about it, or you have a property you want us to manage for you, we are just a call away.

STEPS TO BUYING A HOUSE: THINGS TO LOOK OUT FOR DURING INSPECTION AND IMPORTANT QUESTIONS TO ASK.

Buying a home is an important phase in one’s life, that’s why buying the right home is quite a delicate matter when considered; apparently, like any area of personal finance, there’s no big secret to buying a house — but it does involve thinking differently and acting right than most people. Most of us want to own a home but the problem is we can get so eager to own a home, and that we start to compromise on things that are important—really important.

Today we would be discussing the steps to buying that dream home of yours, fully understanding major things to never compromise and the questions to ask:

  1. Start your research early on your local markets: As soon as you can, start checking out websites such as Abodeslagos.com, newspapers, and magazines that have real estate listings; take note of particular homes you are interested in and see how long they stay on the market, likewise observing any changes in asking prices as this will give you a sense of the housing trends in specific areas.
  2. Check your personal finances to determine how much you can afford for an apartment, while listing priorities in terms of each house facilities.
  3. Check in with your Mortgage bank to get pre-approved for credit facilities, we have quite a number of banks in Nigeria that provide such services.
  4. Contact Abodes Lagos as your agent: Real estate agents are important partners when it comes to one buying or selling a home and Abodes Lagos being the best and most trusted in Lagos, we provide you with priceless hacks on homes and neighborhoods that you are not likely to come across out there. Our knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in (our Lagos) has been proven to be extremely valuable to all our clients both existing and new customer. And guess what, best of all, it doesn’t cost you anything to use us  as your agent as we are compensated at deal closure.
  5. Handle Inspections and make an offer: Now, when you begin touring homes with your real estate agent, you may be focused on the size of the yard or the square footage of the kitchen, but there are other attributes to a home that are even more important to consider when handling inspections, specific things to look out for and questions that you need to ask as a buyer include:
  • Roof condition
  • Signs of foundational damage: if the foundation of a home is damaged, you are looking at probably hundreds of thousands of Naira in repairs. Look for signs of cracking near the foundation inside and outside the home and pay attention to the grade of the floors for signs of unevenness, which may indicate a sinking of the foundation.
  • Potential for flooding
  • Mold, weathering and water damage: Take a peek inside the cabinetry for signs of mold growth around pipes. Mold growth may indicate a leaky plumbing system, previous flooding or improper ventilation. You should also look for other signs of water damage and excessive weathering, such as musty odors or peeling paint
  • Insulation and energy efficiency: The better the insulation of a house is, the less you will have to spend on utility costs when it comes to heating and cooling throughout the year.
  • Documentation: You don’t want to be caught in-between lawsuits over properties with injunctions or any form of legal dispute for that matter, a proper legal investigation needs to be carried out. But Hey! Stress not…. Our legal team is always at your disposal.
  • General structural integrity and reliability; look out for piping networks, sewage disposal, wiring… just to make sure all is in accord.

You’ll want to be certain that you are making a good investment when you purchase a home, so you should avoid those with major problems as they will need costly repairs shortly after you make your purchase, which wouldn’t be good for you.

The other aspect are the questions that are not to be forsaken during an inspection which are:

  • Are there any ongoing maintenance issues?
  • How much do utilities cost on average?
  • What’s the neighborhood like?
  • Is the insulation in good shape? Simply means is the house well ventilated.
  • Are there any upcoming replacement needs?

As easy and straight forward these questions are, they are extremely crucial in the decision making in one buying a home; however, there is a mistake most people make which is neglecting structural integrity for aesthetics. Painting your new house can be considered an act of basic remodeling but when it overrides the fact that an apartment is actually a great investment, it could be a huge loss to such a buyer. We advise always taking a double inspection of a place as a second visit is usually considered important.

Buying a home is important, even though one reaches a financial place where you can buy a house, one might buy a house he/she is not going to be happy about.

At Abodes Lagos, your satisfaction is our top priority, and we believe that there will be tight schedules in play for most of our clients, that’s why our team performs what we call a pre-inspection of all facilities and properties before you – our esteemed client –  can come in for inspections, to make sure what we say is what you get.

For all your real estate concerns and enquiries kindly contact us today on +2348154280575, +2348023624714 and be sure to get a prompt response as we’ll love to entertain your questions.

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