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.