Why is it that some people can lose money speculating in property ?

Question

why is it that some people can lose money speculating in property ? property prices is always increasing. and if property market is at its low , one can still rent the property out or live in it , then wait till property prices increase again , so how do some people actually lose money in property?

Answer 1

Three important things you must remember to avoid loss money when purchase a property is...

1) Location

2) Location

3) Location

Answer 2

Property prices do NOT allways increase in value.

Example "

In the USA right now there are hundreds of thousands of houses that are sitting empty, because the owners  could not pay their monthly mortage payments. Why? They lost their job, or the mortgage interest rate went up.

So when  the occupants walk away, what happens to the investor ? They loose too. No payments coming in..........A loosing situation.

Another example might be an investor who puts money into buiiding a office tower, and once it is ready to be occupied, the economy goes into a slump and very few tennants sign leases for office space . End result, low return on the investment.

A final example. Houses in the UK are at a very high point in price, BUT the economy is faltering, so prices may go down in the near future.

Don't bank on a year after year increase in property values. Remember that the selling price is what ever people are willing to pay, or are ABLE to pay.

Jim B. Toronto..

Answer 3

If you buy a property in Springfield and a Nuclear Plant is built right in front of your property then the value of your property drops.

If you buy a property in Hawaii and a Volcano erupts in front of your property then the value of your property drops.

If you buy a 5 Star hotel in Rwanda and your Tutsi guests are murdered by Hutu then the value of your property drops.

If you own St. Nicholas Greek Orthodox Church, Deutsche Bank Building or Borough of Manhattan Community College's Fiterman Hall (All of them in New York) then I dare you to find out what happened to the values of those properties.