Real estate market risks

Investing in the real estate market can be a lucrative way to make money, but it's important to understand the risks associated with such investments.

There are a variety of potential risks associated with investing in the real estate market, from financial risks such as market volatility and interest rate fluctuations to legal risks such as zoning regulations and tenant disputes.

Real estate market analysis, also known as comparative market analysis, is an assessment of current market values of real estate that can be compared to the assets you are looking to buy or promote.

The notion of market implies knowledge of the price formation mechanisms of the product in question. Although there have been, for a long time now, transactions of sale, purchase or rental, on the housing market in Algeria, the latter remains marked by a lack of transparency, especially when the question of real estate prices is approached. .

The establishment of a housing price monitoring system is therefore of crucial importance, due to its potential contribution in terms of improving the transparency and functioning of the real estate market. Such a device will only be possible through the creation of a price index capable of surveying market players on the evolution of housing prices over a given period. This is how this paper looks at the issue of the construction of a price index on the real estate market.

The greatest reward of this job is of course the success of the mission entrusted but also that a client recommends our services to his entourage.

Defects
During a purchase, you also run the risk of poor workmanship and hidden defects. If you are not an expert in this field, do not hesitate to have an expertise done before committing yourself.

Degradations and unpaid
An ill-intentioned tenant can quickly put a strain on the profitability of your real estate investment. In addition to the damage that requires you to rehabilitate the accommodation between two tenants, unpaid bills are a real problem. In addition to lost revenue, non-payments can quickly cost you money in legal fees.

Depending on where the property is located, an eviction can be a long, difficult and expensive process. There is insurance to protect against non-payment but it is also an additional cost. Think about the tenant profile you want and make sure the property you are considering attracts the right candidates. Once purchased, carefully analyze the requests of prospective tenants before signing the lease contract.

Tax changes
Depending on the location and type of property in which you invest, you may benefit from tax exemptions and deductions. Be careful not to base your investment decision solely on these incentives because the tax rules can change over the investment period of your property and affect its profitability.

This list is probably not exhaustive but allows you to have a more balanced view of your project. And remember that risk is not in itself a bad thing because it can be rewarding. The important thing is to estimate it as well as possible in order to mitigate it and be able to manage it. And you, what are your strategies for managing these risks?

Do not hesitate to ask me your questions or give me your opinion in the comments.

source of content: algeriahome