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Property investment has always been a burning topic in the world of real estate. People have shown their interest in investing large amount in residential and commercial properties. There are several risks, which might not be visible be to you, but you need to learn about them. Visit the link to know more!
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MAJOR RISKS IN REAL ESTATE INVESTMENT YOU MUST CONSIDER HamadAlWazzan
Property investment has always been a burning topic in the world of real estate. People have shown their interest in investing large amount in residential and commercial properties. There are several risks, which might not be visible be to you, but you need to learn about them. Have a sneak peek at the top five risks:
Financial Risk A number of people take huge debts for investing in property. But, are you really aware of the fact that the use of debt magnifies the investment risk? Yes, this risk is directly proportional to the amount of debt taken.
Liquidity Risk The unavailability of continuous market, i.e. when a good number of buyers and sellers are not present, it becomes difficult to sell a property. In such circumstances, one has to under-sell the property or wait for longer time, sometime up to a year for perfect price!
Management Risk This type of risk is based on the ability of the management. How it respond to economic conditions, maintain the property, negotiate leases, etc. contributes to this. Not only commercial, even the residential properties are affected. Therefore, it is advisable for the management to go for the registered leases for residential and commercial properties.
Legislative Risk Another major risk involves legal regulations like tenant laws, registration procedures, restricted use of property, and several other restrictions, which are imposed by the state bodies. While investing, it is important to consider these risks too.
Environmental Risk What if you buy or construct a property in the areas under jurisdiction? This will surely affect the returns on your investment. Thus, you need to be a smart buyer.
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