The Risks and Returns


Risks of Property Investment
In the past residential property was considered unsuitable for personal investment and this was because landlords had to deal with strict rent controls on their properties. Also, it was difficult to find tenants who would stay and therefore guarantee continuity of income return.

For these reasons, having a tenant in a residential property had the effect of reducing the value of the property. This has changed radically, of course, and today residential property investment is considered to be very sound, even though it is still not without risk.

Some of the drawbacks of this type of investment are:

  1. Instability: Despite what many people think, there is never a guarantee that property is a stable investment. If there is an oversupply of rental properties in a particular area, the landlords cannot achieve the rents they are looking for. Combined with rising prices and interest rate increases, many private residential property investors find themselves in a situation where they cannot afford to keep the property and therefore have to take their profits out, b...

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