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 🔍
One major risk is the potential for unexpected costs like emergency repairs or months without rental income if you’re unable to find a tenant for your property 🔧💸
Like stocks, real estate markets can fluctuate a lot.
A downturn in the economy can significantly impact the value of your investment 📉
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 ⌛
So if your investment is losing value, you might be stuck holding the bag since it’s not as easy to sell your property as it would be to sell a stock 😓
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 💸
There are also unique risks to being a landlord, like destructive tenants, squatters and potential legal issues 👨⚖️
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 🌳
As with any investment, thoroughly educate yourself and carefully weigh the potential risks and rewards before getting started! 🎓
Test your knowledge
Unexpected costs in real estate investing include:
Choose an option
Real estate is:
Choose an option
The 2008 housing market crash:
Choose an option
Risks unique to being a landlord include:
Choose an option
Before investing in real estate, it's important to: