Real estate investing can be quite lucrative but involves various risks to navigate. Some key risk factors include location, vacancy rate, negative cash flow, tenant problems, and lack of liquidity. Investors also face the general unpredictability of the real estate market and any hidden structural problems.
Here are eight risk factors to consider before jumping into a real estate investment opportunity:
All real estate investments and other wealth creation instruments should be carefully strategized and executed. It’s always smart to perform a feasibility study on any property or other asset you’re considering. Ask about any risk factors concerning you, and be sure to get straight answers that you fully understand before you enter into any investment opportunity.