What Risks are Involved in Real Estate Investments?

I myself believe that investing in properties is a great idea to save for the future. A property in our neighbourhood was up for grabs for Rs 7 lakhs in 2014 but in 2022, it was sold for Rs 32 lakhs. If you can do a property real estate risk analysis, you can earn or save a great deal of money. After all, nothing is risk-free nowadays. Since I am studying a bit about what risks are involved in real estate investments, I can share with you what aspects must be looked into more diligently. If you are also thinking of investing in real estate, I am sure this answer will be helpful.

What are the real estate benefits and risks?

Investment can be both beneficial and risky. So, some benefits of investing in real estate are:

• Property prices will rise. In the upcoming years, the property market is expected to flourish hugely. So if you invest Rs 30 lakhs now, you may get Rs 50 lakhs for it after 5 years. 

• You can buy a property and then rent it out. At least your rental income will help you to get you the money invested and also give you an extra source of income.

• Stock market and crypto are way more dangerous to invest in than real estate. Recessions might give huge blows to all three but trust me, still, real estate will be a better option than the other two

• You can enjoy tax benefits if you opt for a home loan under Section 80C

There are also some risks like

• Suppose you have taken a loan to buy a property and then rent it out. Now if you don’t get a tenant and fail to sell it quickly as well, you might be in huge debt without having any clue what can be done.

• Taking care of the property is also important. You cannot buy it and then just leave it. Maintenance charges, repairs, and renovations can at times get annoying so there can be a management risk as well

• Always make sure the property is legal. If there is a single case filed against it or some illegal aspects found in it, you can be in big trouble. 

Real estate risk analysis can be done minutely by experts. If you are trying to invest in real estate, try to have a discussion with some experts and then only proceed.