Risk are part and parcel of any business venture or investment. There is the possibility that an investment’s actual returns might be different from what is expected.
This is usually expressed in terms of volatility of return. Generally, the greater the risks, the greater the rate of returns an investor will expect.
So here are the five “L”s of property investment risks.
So once you understand these 5 L, you can take all the necessary measure to mitigate the risk.
Here are some measures that you can take:
- Have a cash buffer. Property investment is a cash intensive game. You should have at least 6 months to 1 year of monthly installments worth of savings.
- Know your legal process. You should know what you are signing at. Know the reason why the documents and agreements are there. Seek legal advice if you are unclear.
- Expand your network. You should get to know the other players in this industry: the valuers, real estate agents, conveyancing lawyer, mortgage brokers etc. All these people can give you insights and tips on how to mitigate a specific risk. So, be friendly. Get in touch with them. Keep them in your close circle.
All the best in your property investment journey!
– Faizul Ridzuan
P/S: Are you excited to start your investment journey? Come and join the Millionaire Employee Blueprint seminar, where we share with you the strategies you need to start your journey the right way, just like how I did it buying 23 properties by 30 years old. Click here for more info.