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Real Estate Investment Risks & How to avoid them?

Posted by wpuser on
| 1

Real Estate Investment Risks & How to avoid them?

Every business or investment opportunity comes with their fair share of risks. If you are buying stocks, there’s always a risk of stock markets rising or falling overnight. If you invest in valuable metals or gold, their prices may vary with time. If you have saved your money in retirement or mutual funds, their service fees might increase suddenly.

Similar is the case with investment properties. There are multiple real estate investment risks but they can be reduced or eliminated if you could work with an experienced team.

Some of the common real estate investment risks are:

Risk# 1: Property burning down or getting damaged by the tenants or natural disasters

Solution: Every investment property comes with the hazard insurance which allows you to reimburse money for the damages including total loss.

Risk# 2: Tenants moving out

Solution: While doing your research for property management or turnkey companies, make sure that you inquire them about rental protection. All our properties comes with a 1-year rental protection plan, which ensures our investors that if there’ll be any vacancy, we will pay them their monthly rent while looking for new tenants. This situation rarely arise in cities like Chicago where rental properties are in huge demand.

Risk# 3: Market depreciation and property losing its value

Solution: Market appreciation or depreciation is a part and parcel of real estate investment business. Whenever markets depreciate, they adversely affect high-end properties mostly. That’s why; it is advisable to invest in middle-end properties because they are the ones that are least affected by market depreciation. They include single family homes, condos, duplex etc. These are the properties that remain in high demand, no matter what the market condition is. People are always looking for rental properties. But if you only invest in high-end properties, it would be difficult for you to find quality tenants during the bad times.

There might be real estate investment risks but if you choose the right team, you can easily avoid them. Some of the things that you should figure out before working with a property management team are:

  • Meet them at their work place. See how they work and manage properties.
  • Check the properties in person. Get them evaluated by hiring your own property inspectors.
  • Work with people who invest in the same properties and neighborhoods where they are asking you to invest. This shows that they have vested interest in your safety and success.

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One thought on “Real Estate Investment Risks & How to avoid them?

  • jesse Garcia
    on

    Great Info

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