Real Estate Investing: Risks

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:

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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:

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