Real Estate Risks and How to Avoid Them

Any new venture can be intimidating, and that’s certainly the case with real estate investing. I hear questions constantly from new or prospective investors who are worried about risk. Sure, there are horror stories about investors who lost it all, but if you play your cards right and put a few safeguards in place, you will are very unlikely to encounter issues. 

In order to mitigate risk in real estate investing, you should know that you can’t do it alone. It’s important to build a strong team that is well versed in the areas that you are not. Without the right team in place, you’re likely to make some mistakes.

It’s also incredibly important to not overspend. Don’t overspend on the purchase of the property. Don’t go overboard with upgrades either. When you pour too much into your properties, you’re decreasing your overall return. Check out my videos on the top three renovations that are a waste of money, as well as how to determine how much to spend on a rehab! 

Invest in the right areas. Personally, I like to invest in C class neighborhoods. The tenants are hardworking blue-collar Americans. If your tenants are stable, you’re more likely to have consistent rental income year-round.

Work with an experienced property management team. Find a company that will thoroughly assess the applicants in order to find reliable tenants. Work with a team that is local to your property and knowledgeable about the market. This will ensure great tenants and fewer vacancies. Want to know how to hire the right team? Here's a list of five questions you should ask a property management company.

Purchase your property in landlord friendly states. If you have to go through an eviction, you’ll want to be in states where the legislation is on your side. In states that favor tenants, it can be extremely difficult to remove a tenant who isn’t paying their rent. 

If you follow these five tips, you'll be sure to mitigate risk in real estate investing! Want a foolproof investing plan? Book a call with our team! We'll set you up for success in the right markets with the right property management teams. 

New investors are naturally worried about risk. Sure, there are horror stories about investors who lost it all, but if you play your cards right and put a few safeguards in place, you will are very unlikely to encounter issues.