ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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tenants may not pay rent
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tenants may destroy your property
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real estate values may increase
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real estate values may decrease
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Detailed explanation-1: -Real estate investing can be lucrative, but it’s important to understand the risks. Key risks include bad locations, negative cash flows, high vacancies, and problem tenants. Other risks to consider are the lack of liquidity, hidden structural problems, and the unpredictable nature of the real estate market.
Detailed explanation-2: -Financial Risk: The interest rates are never constant, and this can lead to rise in the financing costs, which is surely not good for you. Both commercial and residential property investor are affected by this risk.
Detailed explanation-3: -Some of the main risk factors associated with REITs include leverage risk, liquidity risk, and market risk.
Detailed explanation-4: -If you have been involved in real estate for any length of time, you’ve heard it said that the three most important things when it comes to real estate are “location, location, location.” I’ve heard nationally-recognized experts say that over and over on national media.