Five Key Risks of Today’s Real Estate Market

3 Replies

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 constantly have to remind people of this simple word of wisdom.

Anyone have other risks to look out for???

biggerpro,

Those are all great points. I also recommend:
1. Know your market (average price properties are selling for and what they can be rented at)

2. Set limits for yourself when biding for a property. Its easy to get carried away and buy to high.

Number 5 - not planning for financial emergencies is one I really need to start working on. It is so tough to cover everything else, that you never think that in an instant, an emergency can wipe you out. Thanks for the wake up on that one!

nice useful article there, thanks!

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