19Nov/16

Risks of investing in real estate. Be very careful before investing your hard earned money

With the booming real estate market, every second person wants to make investments in real estate. To many, this market seems to glorifying. They assume it to be a win-win investment where all they need is to pay and then enjoy good returns when they want to liquidize their assets. The real estate market is not as simple and beautiful as it seems. With so many advantages, there comes a complete package full of disadvantages. There are many things to consider before jumping into this market. Only an investment that has been made wisely promises good returns.

Post is sponsored by Mirabella Condos

Disadvantages of real estate investment:

  1. Finding finances:

The major task after a real estate investor finalizes the deal for buying the property is finding a good company for financing. The lending institutions do not lend their money very easily to everybody. Usually they ask for a down payment of 20%. Although there are lending institutions available that pass the loans generously but, finding finances for investment is not at all an easy task. It needs an input of lot of time and efforts. Even if you end up getting your finances approved, you need to be very careful regarding the policy and contract you sign. There might be some catches which you may not be able to see.

2. Debt:

Usually investors do not have solid cash at hand to make an upright payment for the property. After a down payment, they turn up to financers for loan. This is a form of debt. If the investor is buying for flipping purposes, and the property doesn’t sell right away, the investor gets stuck with the monthly payment and the property also hangs in the mid way until he gets it sold for a good price. If he thinks of putting up the property for rentals, there is always the chances the tenant might stop paying the rent. Then, he might have to go to the court and get the tenant removed from his property. Until he finds a good tenant, he is stuck with paying the debt money and a vacant property.

3. Additional expenses:

Investing in a property that has to be put up for rentals requires many additional expenses from time to time. The place has to be kept in immaculate condition to attract tenants. All the additional maintenance charges have to be paid by the owner. In addition to this, heavy fines might be slapped if the place is not kept up to the mark.

Here are other risks. please check this video. Have a safe investing.