How risky is real estate investing on a scale of 1 to 10

7 Replies

@Louis Dobrik Any sort of investment is risky but if you do your homework and the numbers look good I think real estate investing is the way to go. It may take awhile to find your first deal but it’s out there if you’re actively looking.

@Louis Dobrik that is going to depend on how well you do your research and how prepared you are.  Swimming across a small pond or river may not be risky if you know how to swim and have a life vest on.  If you have never swam before and are wearing hiking boots it could be a lot different.  I think real estate is pretty safe if done right.  Often the amount of benefit you get from informed risk can be proportional to the amount of profit.  In other words a nice reasonable priced duplex may be a lot safer than a 10 unit apartment building, but may make a lot more money.  Get educated and jump in.

I agree with @Jerry W. in that the greatest risk lies with you. There is risk involved with everything, including walking to the local deli for a sandwich on your lunch break. If you educate yourself, you reduce your risk. If you work hard, you reduce your risk. If you don't panic but work through difficulties and overcome obstacles, you reduce your risk.

I don't know how to quantify it on a scale because every deal and every investor is unique. With 10 being the highest risk, I think it's a 2.4 for me.

@Louis Dobrik I like @Nathan G. example about walking to a deli on a lunch break. I also think that @Jerry W. summed it up pretty well for you. How safe is swimming if you don't know how to swim?! If one is a professional swimmer, they will train to always get better and improve their results and be able to swim long distances. On the other hand, if someone just started swimming and hasn't done long enough, what are their chances of being able to swim long distances?! The same concept applies to any skill in life. RE investing is a learn-able skill.  The more you learn about it and actually do it, the better you become. 

Best!

Knowledge and risk move in inverse directions, especially for investors with lots of experience.

Real estate is not a complex business.  It just takes perseverance (like most endeavors in life).

@Russell Brazil   I agree with Russ totally depends on what kind of real estate.. keep in mind that when you ask this on BP 90% of those on this site will gravitate to the only real estate is rental either sfr or small plexs or MF.. there are many many other types of real estate .

take for instance in my mind one of the safest and most passive is investing in land in the path of progress.. pay cash and hold it.. nothing to it.. over time if you buy right or you buy a timber tract with middle age marketable timber species like Doug Fir or white pine  west  East  … these are very solid long term safe investments that you just make and sit and wait.

some of the biggest money made in real estate though is land in the path of progress.. this keeps you immune from the ups and downs and risks of tenants.. 

And so on and so forth.. each has its risks..