Investment

5 Types of Risk Every Real Estate Investor Should Know About

High quality 3d render of a miniature house on a blue financial chart. Housing market concept. Miniature house is lit by the upper left corner of composition. Horizontal composition with copy space. Great use for real estate and morgage related concepts.

5. Leverage Risk. The more debt on an investment, the more risky it is and the more investors should demand in return. Leverage is a force multiplier: It can move a project along quickly and increase returns if things are going well, but if a project’s loans are under stress – typically when its return on assets isn’t enough to cover interest payments – investors tend to lose quickly and a lot.

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