Like all investments, real estate investments carry inherent risks, such as:
- Market Fluctuations: Real estate values can fluctuate based on market conditions and economic factors.
- Vacancy Risks: Rental properties may experience periods of vacancy, affecting rental income.
- Interest Rate Changes: Rising interest rates can increase borrowing costs for financing property purchases.
- Property Maintenance: Properties require regular maintenance and unexpected repair expenses.
- Economic Downturns: Economic downturns can impact property values and rental demand.
- Liquidity: Real estate investments may be less liquid compared to other asset classes, making it challenging to sell quickly.