People tend to think owning a house is a big asset, and if you speculate with real estate, you're sure to end up with lots of money. Not true. You're likely to earn a good profit only if you end up with the correct real estate transaction, at the correct time, and in the correct manner. This article discusses some of the risks involved with commercial real estate buying and speculation.
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Rental Property
Investing in rental properties involves certain risk. Quite often homeowners think a rental property will undoubtedly bring in good profits, but if you really consider the practical aspects, the facts state otherwise. Of course, there is a profit involved. When you rent or lease your property, you will end up getting some money through the deal. The question is how much money are you getting out of it? Rental rates tend to vary according to the demand for residential homes, the area or location of the rental, and the condition of the property available for rent. As years goes by, the value of the property starts depreciating, and fewer tenants will be ready to pay a higher rent, especially if the property is not maintained properly. Another aspect is the type of tenant you are likely to get. Good tenants, which pay their monthly dues in time, are a bliss. Tenants who simply refuse to pay their rental fees for some reason or other are a liability, and chances are you might be forced to seek an eviction.