Risk is part of any investment. Nowhere is that more apparent than in real estate. When you purchase a property, there’s no guarantee you’ll see a profit.

No investment is risk-free.

In fact, choosing not to invest comes with even bigger risks, particularly as inflation impacts your savings!

Here are strategies to keep you ahead in the industry; 

1. Property selection strategies.
   
   Location is key when it comes to real estate and changes in the neighbourhood can heavily impact property prices.
   
   To Mitigate location risk:
   
   Choose properties in hot markets, and are close to urban centres.
   
   Get professional opinion of potential neighbourhoods from property consultants.
   
   Stay updated on local zoning laws and upcoming development projects.
   
   

2. Financing options and strategies.
   
   Working with reputable financial institutions will ensure you get manageable interest rates and also secure favourable financing, which can impact the profitability of an investment property.
   
   Mitigating Financing risks include;
   
   Maintain a good credit score to secure favourable loan terms.
   
   Avoid over leveraging by maintaining a healthy debt to equity ratio.

3. Property management best practices.
   
   Ensure you have the best property management practices when dealing with your tenants/guests, and also inspect and maintain your property when something breaks down.
   
   
   

4. Understanding real estate investment types.
   
   There are multiple investment types in the industry for most investors they include residential, commercial, and mixed use investments.
   
   An investor should understand the type of property they’re interested in to mitigate the risk associated in investing in real estate projects.
   
   

5. Tax strategies for real estate investors.
   
   While there are multiple tax benefits of real estate investing, there is a risk that rising property taxes, changes in tax policies, or poor tax planning can affect the net return on your real estate investments.
   
   To stay on top; ensure you stay updated on tax laws and potential changes.
   
   Consult with tax professionals to reduce tax liabilities.

Nothing can prepare you to handle real estate investment risks like talking to the right people and getting good advice. With over 10 years of experience, the professionals at Finsco Africa can help you find suitable investment properties, for you and your loved ones.