While real estate can be a great investment, it's important to understand the many risks before jumping in.
While real estate can be a great investment, it's important to understand the many risks before jumping in ๐
One major risk is the potential for unexpected costs like emergency repairs or months without rental income if youโre unable to find a tenant for your property ๐ง๐ธ
Like stocks, real estate markets can fluctuate a lot.
A downturn in the economy can significantly impact the value of your investment ๐
But remember: real estate is an illiquid asset, meaning you can't simply click a button to cash out your investment if you need money fast โ
So if your investment is losing value, you might be stuck holding the bag since itโs not as easy to sell your property as it would be to sell a stock ๐
For example, the 2008 housing market crash caused many investors to lose a lot of money or even go bankrupt, especially those who had taken on too much debt ๐ธ
There are also unique risks to being a landlord, like destructive tenants, squatters and potential legal issues ๐จโโ๏ธ
Still, no investment is without risk, and real estate has proven to be one of the most reliable ways to grow wealth over the long term ๐ณ
As with any investment, thoroughly educate yourself and carefully weigh the potential risks and rewards before getting started! ๐
Test your knowledge
Unexpected costs in real estate investing include:
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Real estate is:
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The 2008 housing market crash:
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Risks unique to being a landlord include:
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Before investing in real estate, it's important to: