Investing in real estate and in particular, owning rental properties, is a great way to build multiple streams of passive income. However, inherent in every real estate investment is the element of risk.
If anyone tries to paint a different picture, avoid investing with that person. In fact, risk is present in every type of investment and typically the higher it is, the higher the potential gain.
While you can never predict how an investment will play out, you can at least attempt to identify risks beforehand and do what you can to try to mitigate their impact.Here are some of those risks to consider when owning rental property.
“Bad” in this case refers to hidden problems not immediately apparent. This includes things like structural and foundation issues, mold, delayed repairs like roofs, or defective appliances.
Liability is a huge thing to consider in real estate. There are always debates about the best way to protect yourself and how to wall yourself off against potential lawsuits.
I haven’t seen price reductions like I’m seeing now in quite a while. The key to avoiding risk in this area is to plan for it when you purchase the investment.
Location, location, location… you’ve probably heard that saying quite a bit before. All it means is that choosing the right location is vital when it comes to investing in real estate.