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However, there is no profit without risk in any field.
This is true with property investment as well.
Generally, risks in property investment are far more than potential rewards.
It is therefore, always advisable to understand the risk factors before investing to minimize the risks associated with it.
We will now study different types of risks associated with property investment: 1.
Loss of investment: The most dangerous thing associated with property investment is loss of investment money.
The dangerous this blow can be depends upon the amount you invest in property.
The more you invest, the more you can lose.
2.
Loss during Speculation: If you want to flip houses or you are in house speculation business, then you may lose even more than you have invested.
It may also happen that you may get injured during the ongoing work at site.
The worst part of entering in the business of property speculation is that you do not have enough insurance coverage.
These types of deals do not have enough time too to deal with serious injuries.
3.
Uncertainty: The market is full of uncertainties.
Trends of market keep on changing.
Sometimes a big company may open its office at your place increasing the value of land.
On the other hand, it may also happen that some companies of your area may shift their office in some other city thereby reducing the value of land.
Some accident may happen during construction work.
There may be some natural disaster or worst enough the buyer may change his mind.
All these things greatly affect property investment.
There is always possibility of happening of some events, beyond the control of the person investing in property.
4.
Lack of inspection: Site inspection is most important thing in property investment.
Sometimes lack of inspection may result in huge losses.
Some investors fail to take time for properly investing the site.
Or sometimes they find out the faults quite late.
Sometimes there are structural problems in some properties making it difficult to resell the property.
You may even have to sell that property at loss.
Sometimes, it may result in loss of business.
To avoid this, you must tell your potential buyers about the problem or you should yourself sort out the problem before selling the property.
These were some of the risks involved in business of property investment.
However, you should not be discouraged with these risks as some amount of risk is involved in almost every type of business.
Moreover, you can avoid all these problems by exercising caution while making decision related to property investment.
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