BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
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.
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!