The Industry Insights
  • Home
  • E-Magazine
  • Listings
  • Blogs
  • Startups
  • Industry
    • Finance
    • Technology
    • Real Estate
    • Construction
    • Manufacturing
    • Healthcare
    • Education
    • Entertainment
    • Tourism
  • Success Stories
  • Subscribe
  • Home
  • E-Magazine
  • Listings
  • Blogs
  • Startups
  • Industry
    • Finance
    • Technology
    • Real Estate
    • Construction
    • Manufacturing
    • Healthcare
    • Education
    • Entertainment
    • Tourism
  • Success Stories
  • Subscribe
No Result
View All Result
The Industry Insights
No Result
View All Result
Home Services Real Estate

Real Estate Investment: As Safe As Houses?

moin by moin
27 October 2021
in Real Estate, Services
0
Real Estate Investment: As Safe As Houses?

Real estate investment. House and coins on table.

0
SHARES
13
VIEWS
Share on FacebookShare on Twitter

Real Estate Investment: As Safe As Houses?

Usually, Investors use the term to refer to an extremely safe investment with the phrase ‘As Safe As Houses’. This shows the typical mentality that real estate is the safest option of investment. The old school chain of thought believes that real estate investing is largely risk-free and provides the best hedge against inflation.
However, the world has recently discovered after multiple real estate crashes that the houses aren’t as safe as they were considered to be. This article enumerates the various risks that an investor has to face while investing in real estate properties. Some of the common risks are as follows:

Risk of Bad Tenants
A lot of people that invest in real estate usually invest for the sake of cash flows that are received from real estate. These cash flows are received in the form of steadily rising rental payments. The assumption behind these cash flows is that investors will always be able to find good tenants. Good tenants pay up on time, do not destroy property and create no other legal hassles.

Liquidity Risks
Real estate investments are probably the most illiquid as compared to all other investments. This is because the amount of money required for real estate investments is huge and it takes a huge commitment from the personal finances of any investor.
Therefore, in case you are a real estate investor and want to exit a property, there is no ready market which will provide minute to minute quotes regarding your property. Also, the buyers who are willing to enter into such a huge transaction are few and far between.

Leverage Risks
People usually buy a home with a mortgage. The mortgage stretches over an extended period, let’s say 30 years or so. Therefore the interest that is due on the mortgage is several times the original amount borrowed! To add to that, the first few monthly payments that are made towards mortgage comprise almost exclusively of interest. Hence, over the first 4 years or so, one hardly pays back any principal.
Since real estate is leveraged so highly, it almost exclusively relies on the property prices rising continuously. The property prices do not need to fall down. A mere stagnation would make the interest costs unsustainable and would take the investment in the red!

Counterparty Risks
A lot of individuals that buy real estate usually buy unfinished units. Unfinished units are generally cheaper, and developers are willing to provide more favorable financing. However, buying under construction units also carries some serious risks.
The investors become vulnerable to default by the developers. Also, many times the developers are unable to get the required permissions from the local authorities. As such the project gets delayed. As a result of this delay, buyers end up losing a portion of their investment as they have to continue to pay rent.
Thus, real estate investment projects are prone to counterparty risks. Investors need to be diligent and have a plan to mitigate such risks.

Information Risks
The real estate market is extremely opaque when compared to other markets. There is up to date and accurate information available in markets like stocks, bonds and bullion. One can use the data to gauge the trends in the asset class and make informed decisions.
However, when it comes to real estate, the only data that is available is from local brokers. These brokers have vested interests and therefore have no reason to provide reliable, actionable information. Data related to the ongoing rental and capital values is therefore largely a guess!

moin

moin

Related Posts

Advantages Of Investing in Pre-Rented Properties in India
Real Estate

Advantages Of Investing in Pre-Rented Properties in India

26 November 2021
How To Predict the Real Estate Market and Identify Asset Bubbles?
Real Estate

How To Predict the Real Estate Market and Identify Asset Bubbles?

27 October 2021
7 Things To Keep In Mind Before Selecting A Property In Bangalore
Real Estate

7 Things To Keep In Mind Before Selecting A Property In Bangalore

26 October 2021
Next Post
Biden’s former ATF pick David Chipman: “The gun industry profits by gun violence itself”

Biden's former ATF pick David Chipman: "The gun industry profits by gun violence itself"

Government Initiatives For Healthcare in India

Government Initiatives For Healthcare in India

Indian Economy In The Fight Against COVID-19

Indian Economy In The Fight Against COVID-19

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Us

  • 52.2M Fans
  • 121 Followers
  • 26.4k Followers
  • 143k Subscribers

Recommended

Jio leads Airtel in April user additions; Vodafone Idea loses more ground

JIO True 5G services now live in more than 100 cities across India

2 weeks ago

Kotak breaks crypto ice with account for WazirX

1 year ago
India plans for trading programs for companies to curb pollution

India plans for trading programs for companies to curb pollution

2 years ago
Gold prices drop for second week in a row, down ₹6000 from record highs

Gold prices drop for second week in a row, down ₹6000 from record highs

2 years ago

Instagram

  • Photo by  amivitale   A kindergarten student looks up from beneath his cap on graduation day at the Willow Creek School in Willow Creek  Montana  Willow Creek became one of the first schools in the state   and the country   to reopen for in-person instruction  a decision made because Willow Creek is a rural community that had recorded no cases of COVID-19  Numerous safety protocols  including temperature checks  social distancing measures  and masks on faculty and staff  are in place  The educators are as much focused on the students  emotional well-being as academic progress  Follow  amivitale for more stories of hope and joy in the world   thephotosociety  schools  coronavirus  kindergarten  covid19  graduation
  • Photo by Saumya Khandelwal  khandelwal saumya   A guard stands watch from his post at a residence in Lucknow  India  which is in a nationwide COVID-19 lockdown  Follow me on  khandelwal saumya for more from South Asia
  • Photo by Diana Markosian  markosian   I   ve spent the past week in Milwaukee  Wisconsin  on assignment with  andycatarisano  meeting high school seniors who are finishing the school year at home due to the COVID-19 pandemic  Benny Draeger  18  from St  Francis High School  is one of them  On Friday  seniors took part in a celebration unlike any other before them  The school organized a parade  where seniors decorated their cars and drove around town as a way of celebrating the end of their year
  • Photo by  lynseyaddario   Pall bearers with African Caribbean Funeral Services in London lower the casket of a COVID-19 victim  Brandis Metcalf Roberts  who passed away after catching the virus in a care home following discharge from a hospital in West London  It was a double funeral for Roberts and his mother  Alexteen Alvira Roberts  who passed away of natural causes at 104 years old  Statistics show that people of color are disproportionately impacted by COVID-19 both in the U K  and the U S  Across England  funeral directors of different faiths and backgrounds are working to maintain tradition and adhere to religious instructions for burial  To see more of my work  follow  lynseyaddario   insidenatgeo
  • Photo by Robin Hammond  Hammond Robin      I have faced a lot of violence  mob attacks  police cases   because of my sexuality     In 2009  Pearl  not his real name   a transgender man from Ghana  was arrested  When he refused to  confess  to being lesbian  he was handed over to a crowd  Gasoline was poured on him as he was marched to a bonfire  Moments before what would have been Pearl   s murder  his father arrived  saving him  However  fatherly love did not extend to accepting Pearl   s gender identity  The  cure  lay in prayer  it was decided  Pearl was sent to a prayer camp  He eventually escaped the camp and a father who would never accept him  Today he   s an activist for transgender rights  June  Pride month  marks the anniversary of the Stonewall riots of 1969  which changed    gay rights    in the U S  and beyond  Transgender people of color were at the forefront of the riots  Around the world  they are still fighting literally for their lives   BlackTransLivesMatter  For more stories of survival go to  whereloveisillegal
  • Photo by  beverlyjoubert   As we continue to adjust to a world that has been changed so profoundly in the past few months  it is remarkable how much solace we can find in nature   even those parts of nature that had seemed quite unremarkable to us before  Natural wonders can be found anywhere   we just need to train our eyes to see them  Take the most ordinary bird in flight  add golden sunlight to illuminate a fan of translucent feathers  let the shadows of the tree line do the rest  A snapshot of nature   s beauty   and a little moment to soothe the soul   nature  birds  photography
  • Photo by  estherhorvath   I m always interested in how people spend their free time in the most remote locations on our planet  Josefine Stakemann  a geophysicist  plays her violin while resident at Neumayer Station III  in Antarctica  Scientists there spend 15 months conducting research  Please follow  estherhorvath and  awiexpedition for more science stories   Check out Nat Geo s link in bio for more on this story
  • Video by  joelsartore I Found on all continents except Antarctica and Australia  flamingos are one of the most recognized bird species in the world  Flamingos like these  lincolnchildrenszoo live in large colonies  sometimes numbering into the thousands of individuals  In the wild  these colonies often occupy mud flats with nearby estuaries  as this habitat provides the birds with breeding sites as well as abundant sources of food and reduced competition  Follow this flock over to  joelsartore to see more species featured in the Photo Ark   flamingo  bird  pink  PhotoArk  savetogether
  • Photo by Michael Yamashita  yamashitaphoto   Troubled waters  The Mekong River is in crisis  at its lowest level since record-keeping began  A drought in the lower basin countries of Thailand  Cambodia  and Vietnam  coupled with new dams built upstream in Laos and China  has exacerbated a perilous water shortage largely caused by climate change  With the drastically reduced water levels affecting food crops grown on its banks  and fish stocks that have fallen sharply  many of the 60 million people who depend on it have been forced to give up their former livelihoods as farmers and fishermen  Here   s what the healthy banks of Luang Prabang looked like back in the 90s  when I traveled the river from its source on the Tibetan Plateau to its mouth in Vietnam   s Mekong Delta  Recent news sources are reporting that this section is currently unnavigable    LuangPrabang  Laos  MekongRiver

Categories

  • Blogs
  • Business
  • Communication
  • Construction
  • Entertainment
  • Finance
  • Healthcare
  • In-House
  • In-House
  • Industry
  • industry-news
  • News
  • Newsletters
  • O Womaniya
  • Oil & Energy
  • Real Estate
  • Services
  • Startups
  • Success Stories
  • Technology
  • The Latest
  • Tourism
  • trending
  • Uncategorised

Topics

2018 FIFA World Cup 2018 League Asian Games 2018 Chopper Bike Market Stories the latest Visit Bali
No Result
View All Result

Highlights

Instagram Notes Now Coming To More Countries

Nothing Phone (2) may launch later in 2023

Lenovo introduces new Windows 11 laptops, Chromebooks for education

Latest updates on whatsapp messenger allows searching messages by date and the drag and drop features

BSNL to start 5G services in 2024

Wikipedia gets first desktop update after ten years

Trending

The Trailblazer of the Beauty Industry
News

The Trailblazer of the Beauty Industry

by akash
3 February 2023
0

Gopika Avinash-The Trailblazer of the Beauty Industry Gopika Avinash, also known as Gopu Meow in the beauty...

Oppo Reno 8T India launch today

Oppo Reno 8T India launch today

3 February 2023
Government to Introduce National Data Governance Policy for Simplified

Government to Introduce National Data Governance Policy for Simplified

2 February 2023
Instagram Notes Now Coming To More Countries

Instagram Notes Now Coming To More Countries

1 February 2023
Nothing Phone (2) may launch later in 2023

Nothing Phone (2) may launch later in 2023

31 January 2023
  • About
  • Advertise
  • Careers
  • Contact

© 2022 The Industry Insights Magazine

No Result
View All Result
  • Home
  • E-Magazine
  • Listings
  • Blogs
  • Startups
  • Industry
    • Finance
    • Technology
    • Real Estate
    • Construction
    • Manufacturing
    • Healthcare
    • Education
    • Entertainment
    • Tourism
  • Success Stories
  • Subscribe

© 2022 The Industry Insights Magazine