CalculateRealEstateROI

Investor Psychology

Sunk Cost Fallacy

Continuing a losing investment because of money already spent rather than forward economics.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Past spending is irrelevant; only the next decision matters.

Examples

  • Pouring more rehab capital into a deal already 40% over budget.

Common mistakes

  • Throwing good capital after bad to 'avoid admitting' the loss.