Possible Property Risks

Every investment decision necessarily involves an element of risk.  After all, risk is the price you pay for your return.  Just as the more work you do the more you should be paid, it stands to reason that the greater the risks you take, the higher the return you should receive.  This is the “risk/reward trade-off”’

With a better understanding of the types and levels of investment risk, you can make a more informed investment decision - accepting some risks and rejecting others.  In other words, you can manage risk in a manner that best suits your own individual circumstances.

To further minimise your risk, you can also ask your professional advisor for assistance. Remember, however, that no-one can give absolute guarantees as to the selection, suitability or performance of your investment.

Property, like all other forms of investments, is subject to a number of risks that may have an adverse impact on its performance.  The information below highlights some of the risks that you should give serious consideration to prior to investing in property.

Also, keep in mind that some of the areas of risk highlighted could actually work in your favour.  An example of this is a possible land use zoning change – it could be advantageous or detrimental to the value of your investment.

Risk is not something to be scared of, rather it simply needs to be understood, accounted for and managed.  With some very rudimentary research and background work it is very easy to avoid all of these situations.

It is not difficult for example to discover which parts of Australia have consistently had growth rates double the national average.  Since property is so slow to change it is safe to assume that areas that have had higher than average growth in the past are likely to have higher than average growth in the future.  The net result is that you largely reduce the risks that can be present when you invest in property.

And remember…“There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.” – John F. Kennedy

Landlord Central suggests that you work through the possible risks outlined in this document with your advisor.

SPECIAL NOTE: Consumers must seek their own professional advice in relation to the risks of investing in property and must make their own assessment in these areas before investing. We have in preparing this information used our best endeavours to ensure that the information contained therein is true and accurate, but accept no responsibility and disclaim all liability in respect of any errors, inaccuracies or misstatements contained herein. Prospective purchasers should make their own inquiries to verify the information contained herein.