Real estate in the past decade has ranked as top investment for the majority of Americans, but is it really safe and what are the risks involved with the prize? Let’s find out.

7 major risks you would want to know before making any real estate investment for an educated decision in the near future.

As we all know the current issue is the interest rate and the economy. While interest rates continue to rise, both the residential and the commercial real estate markets are affected.

The second most important risk is a bad location. just because a neighborhood isn’t safe right now it doesn’t mean it won't be safe in a few years from now either.

Next risk you should consider is the negative cash-flow if investing. Cash flow is generated by rental income. A negative cash flow will be a rental property that does not generate enough income to pay for operating expenses and debt. For example the monthly rent price is too low or vacancy levels are too high.

The 4th risk is - considering vacancies. This is the biggest mistake that investors make in underestimating vacancies. Vacancy rates are a good indicator whether a market or neighborhood is strong.

5th risk includes problems with tenants. And here starting with maintenance conflicts (who’s responsible for what? When it comes to property damage or maintenance repairs.

6th risk is lack of liquidity. The liquidity measures the rate at which an asset can be purchased or sold on the market at a price that reflects its current value.

7th is hidden structural problems. And in here includes bad sewer lines or rusted pipes, hidden water damage, rotten wood or termites, huge cracks in driveway if it’s a house, bad or old ventilation or windows, radon leaks, outdated wiring, septic system or AC issues, bad roofing, electrical issues, etc.

The bottom line is that real estate has been considered a great investment and savvy investors can benefit from its passive income, tax advantages, opportunity to build wealth and excellent long term returns.

Keep in mind that there are many ways of investing in real estate besides owning, financing and operating actual properties. If you want to learn more let me know in the comments below or reach out by email or text. I usually reply to all my emails and texts in a timely manner.

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Angela Andronache

Broker Associate | Let Realty LLC

Miami FL, 33131

E-mail: Info@AngelaAndronache.com

Connect with me on all the platforms and learn more here: https://poplme.co/andronache/share

Highly focused on Luxury Real Estate, Waterfront properties in South Florida mainly in Miami, South of Fifth, Fisher Island, Miami Beach, Brickell, Normandy Island, Surfside, Bal Harbor, Sunny Isles Beach, Aventura, and West Palm Beach.