I just read a great article in the Wall Street Journal by Jonathan Clements about the 5 key risks of real estate in today’s crazy market. The risks he points to are:
1) Borrowing Too Heavily
2) Selling your property too quickly
3) Using ARMs to get a cheap loan – using adjustable mortgages in a rising interest rate environment is a dangerous formula
4) Not having a plan for financial emergencies such as medical emergencies
5) Skipping a property inspection because you just have to get the deal. A property could have very costly damage that you cannot simply see with the naked eye.
All the above are certainly things to watch out for. A word of advice – don’t jump into anything unless you’ve done ALL of your homework. Sadly, I have to remind people of this simple word of wisdom.
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Article Author: Joshua DorkinJoshua has written 570 articles for us.
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Joshua Dorkin (@jrdorkin) is the founder and CEO of BiggerPockets.Mr. Dorkin's vision for BiggerPockets has helped to propel it into becoming one of the top real estate destinations online. His vision for the site and its future has brought national press attention to both Mr. Dorkin and to BiggerPockets.
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