- May 18, 2019
- Real Estate
Real estate is one of the best investment options available to high networth individuals looking for steady returns, protection against inflation, and lesser volatility than other investment options. Every form of investment, however, has certain risks. While you can always partner with a trusted real estate investment firm, such as Fig Tree Capital Ventures, that can help you avoid the risks associated with real estate investments, it is important for you to be aware of the pitfalls. On that note, we present to you five risks of real estate investments and how to avoid them.
The Real estate market is difficult to predict. Experienced professionals can better understand and time the market to make sound decisions regarding real estate investments. If you bought a property at the right time but end up selling it at a wrong time, you will either record a loss or might miss on a greater return. The real estate market is hugely dependent on local economies. Understanding when to buy and when to sell is crucial to make profits, which one develops with time and experience. That is the reason why most investors take the help of investment consultants when planning to put their money into real estate investments.
Not all real estate investments appreciate over time. If one doesn’t carefully pick a property and think through all the factors, their investment can even depreciate over time. Rental properties, in general, can depreciate the most over time. Real estate investment firms such as Fig Tree Capital Ventures can leverage this depreciation by buying old and beaten down properties at low prices, and selling them for a handsome profit after renovation. If you invest with firms that buy old properties, renovate and sell for profits, you can have better more predictable returns.
Poor Choice of Location
When it comes to real estate investing, finding the right location is everything. The location of a property is one of the prime factors that decides the price of a property. If you do not conduct a thorough location analysis before investing in a property, you might be risking the security of your investment. Picking the right location for a real estate investment opportunity revolves around various factors such as market demand, economy, purchasing power, future prospects, crime rates, schools, the local job market and more. An experienced consultant can help clear navigate the complex factors to help pick locations where there is a great opportunity for growth.
Negative Cash Flow
One of the hidden downsides of real estate investments is the lack of a positive cash flow. It is wise to invest in a property only when it is compatible with the investing and buying power of an individual. Poor real estate investment risk analysis leads to purchasing properties that demand heavy taxes and high mortgage rates leading to a negative cash flow. The best bet is to invest in deals managed by real estate fund managers, they will look for the best deals and manage your capital. Investing in such deals requires you to pay a clear, well-defined amount of money and doesn’t require you to keep up with the ups and downs in payments or unforseen costs.
If you’re looking to make a return on your investment with rental properties, your tenants are the key to making money. But not all tenants pay on time and take good care of the property they are renting and responsible for. Bad tenants can cause you a myriad of problems ranging from frequent repairs to late rental payments. One method to eliminate this issue is to not invest in a rental property and invest in a firm that purchases and sells properties. When you’re involved in flipping properties instead of renting them out, you can save yourself from the hassle of putting up with bad tenants.
If you are a high net-worth individual looking to make handsome returns from real estate, Fig Tree Capital Ventures is here to help. You can avoid the troubles of picking the right location, avoiding negative cash flow or bad tenants and timing the market. Our experienced real estate fund managers do all the heavy lifting for you. We invest in the properties of the metropolitan areas of Texas and Oklahoma where there is a heavy scope for growth in the coming months and years. All our deals are off-market wholesale real estate deals that involve buying old houses, renovating them and flipping them. To steer clear from real estate investment risks, partner with us and leverage our seamless management, network and seasoned consultants. To learn more about your real estate investment options, fill our contact form or simply call (866) 300-2170.