REAL ESTATE INVESTMENT RISKS: HOW TO IDENTIFY AND PROTECT AGAINST 5 MAJOR RISKS

No matter how good the real estate market may look at the moment, one of the most significant real estate investments will always be market risks.

[{"selector":"#anim-634f23aa-d231-460b-a1d7-747e2e0901d4","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3e5af631-627a-4863-87a4-77b69ce7ce8e","keyframes":{"transform":["translate3d(-98.5782%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-12ce4716-d3de-4045-b237-196d126ca6d3","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-24f4661b-d22a-46f6-9e91-787f1c43469a","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0ca37535-33b8-4c4e-b203-cd7600786feb","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-2f83c02d-64ad-45c8-89ee-78c953ed88f3","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

Property-Specific Risks

[{"selector":"#anim-b272c8c1-affb-4786-b1b3-dff80fd9f856","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-fb08f4f8-f9ff-4fbb-a33c-a70b89b4c12a","keyframes":{"transform":["rotate(-90deg) translate3d(0px, -729.62926%, 0) rotate(90deg)","rotate(-90deg) translate3d(0px, 0px, 0) rotate(90deg)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a8853f09-8070-45a5-a22f-a125c5323825","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b9d86bfc-299c-4549-a85f-1680de955050","keyframes":{"transform":["rotate(-90deg) translate3d(0px, 720.10559%, 0) rotate(90deg)","rotate(-90deg) translate3d(0px, 0px, 0) rotate(90deg)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-36b38ede-431b-4f87-827b-cd9fb412ce62","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-68d58327-cee7-44ba-9a20-de0c574d4a47","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-8a352d3c-8f43-41d1-b099-f59115574482","keyframes":{"transform":["translate3d(0px, 322.08668%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more

Liquidity Risk

[{"selector":"#anim-ad7198f1-b2f2-423f-8e9a-1dae7b42ad74","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-df0f3ba5-097d-4305-9013-932d16d58369","keyframes":{"transform":["rotate(-90deg) translate3d(-60.66666%, 0px, 0) rotate(90deg)","rotate(-90deg) translate3d(0px, 0px, 0) rotate(90deg)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bcb12183-a00b-4ca3-8201-0d8adc8bf81c","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e158e658-dcfc-4d1f-86a3-3d45e6482747","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-59da7e4e-a55b-4ca0-97fd-88bb3a925540","keyframes":{"transform":["rotate(-180deg) translate3d(-25.11111%, 0px, 0) rotate(180deg)","rotate(-180deg) translate3d(0px, 0px, 0) rotate(180deg)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bc8e7607-c484-48b0-afdb-5ff3a21106c8","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ece698ef-5459-4bfa-81e2-5533f10585df","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-56c19224-ca2b-429c-b7e3-9d847b0b28b7","keyframes":{"transform":["rotate(-90deg) translate3d(60.44445%, 0px, 0) rotate(90deg)","rotate(-90deg) translate3d(0px, 0px, 0) rotate(90deg)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-71306c5a-51a7-4c9a-8cae-26691f9ccd5f","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3f2612fc-e62d-48e0-ae71-0c67dd719b33","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-7c667289-1f84-43ae-8895-746d6cf76676","keyframes":{"transform":["rotate(-180deg) translate3d(26.88889%, 0px, 0) rotate(180deg)","rotate(-180deg) translate3d(0px, 0px, 0) rotate(180deg)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-172487a2-f98f-4038-8061-fd6c6bc91839","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d0f5bf54-3779-4b97-b583-5fba76527ab6","keyframes":{"transform":["scale(0.15)","scale(1)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"forwards"}] [{"selector":"#anim-b4b27ff9-9d2e-4d32-b08f-4a13a5401482","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-44843cf9-bdb7-449a-824c-0b3b2df9fc7b","keyframes":{"transform":["translate3d(0px, 263.59125%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more

The most common worry prospective landlords encounter is the risk of lawsuits. Since the U.S. is a litigious society, anyone can sue landlords for several reasons.

[{"selector":"#anim-ab46086a-7698-43c5-ae2b-fa0b9d1f839f","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b5723a72-91fa-41f7-8b12-3e910b82db72","keyframes":{"transform":["translate3d(0px, -186.72964%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-7aa109b7-81ef-4cb6-9ace-7a08248c0cfc","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-eb67eed0-0344-40aa-9e5c-95ca26f80365","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-52653027-c0ef-4a65-860c-cdd7d012cf28","keyframes":{"transform":["translate3d(0px, -318.82088%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Lined Circle Learn more

Macro Risk

[{"selector":"#anim-32f00352-e020-4156-b08d-f44e0583e167","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-4f8219c9-13b5-462d-b0fc-b918b870966b","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f69da781-8628-4232-8d24-7ff84ed190b1","keyframes":{"transform":["translate3d(0px, 175.53129%, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a66a6be1-5afc-42b4-9862-ff1d1c4ffa7b","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5c53ad86-25a6-40b5-87d0-a66e381983e7","keyframes":{"transform":["translate3d(100.00000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-7d4a7054-6180-49cc-9a20-1530452afd85","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e68a7e8b-85d8-40f9-8721-92d52e8a584d","keyframes":{"transform":["translate3d(-97.2912%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e300ddb8-33eb-43d5-aa7d-1e3c0a3844a7","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d54745f7-4443-4c0a-81a8-00e88af7769e","keyframes":{"transform":["translate3d(-100%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more

Interest rates

[{"selector":"#anim-d0d08adc-9765-4565-9b54-940808e4fafe","keyframes":{"opacity":[1,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-9a99ca6b-60de-4439-a13d-062d62dddae4","keyframes":{"transform":["scale(3)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-998bc38a-7ad3-4d21-8a22-fe77c3a780f5","keyframes":{"opacity":[1,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-7b8620c8-e809-4902-8d69-a748058063f8","keyframes":{"transform":["scale(3)","scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-3063aff3-768b-4197-8f81-89c17a410f1e","keyframes":{"opacity":[0,1]},"delay":1000,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d46ed363-b4c4-4fd6-9acd-194b6d2d76a9","keyframes":{"opacity":[0,1]},"delay":1000,"duration":600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] Learn more

REAL ESTATE INVESTMENT RISKS: HOW TO IDENTIFY AND PROTECT AGAINST 5 MAJOR RISKS

No matter how good the real estate market may look at the moment, one of the most significant real estate investments will always be market risks.

Property-Specific Risks

Shoddy construction and unsafe living conditions would be examples of property-specific risks that could damage the property.

Liquidity Risk

You aren’t able to quickly sell an investment and get the money from it, even in the best of circumstances.

The most common worry prospective landlords encounter is the risk of lawsuits. Since the U.S. is a litigious society, anyone can sue landlords for several reasons.

Business Risks

Macro Risk

The real estate market is critical to the health of an economy: A growing real estate market will help to grow the economy, but a crashing market may bring the entire economy down.

Interest rates

If interest rates are too high, this may present you with a real challenge regarding debt repayment or raising capital for real estate.

Swipe Up To Read More

Swipe Up To Read More

Other stories