Real estate investing can be a great way to build wealth and generate passive income, but it is important to be aware of the risks involved. Some of the most common risks include:
Market risk: The value of your property can go down as well as up. If the real estate market declines, you may lose money on your investment.
Tenant risk: If you rent out your property, there is a risk that your tenants may not pay their rent or damage the property.
Interest rate risk: If you finance your investment with a mortgage, rising interest rates can increase your monthly payments.
Rehab risk: If you are renovating a property, there is a risk that the renovation costs will exceed your budget.