Risk and investment property are two concepts normally never associated with each other, however, with continuing trends of investors towards financing their entire purchase and legal fees it is apparent that they are now indivisible and must be considered prior to any investment property purchase.
When determining risk the main factors to be considered include:
•Interest rates on finance
•Property Value and Worth
•Property prospects for capital appreciation
These factors and risks can influence both the investor and the financial institutions used for finance resulting in sometimes unforseen additional costs to counter some risks such as mortgage insurance, landlord insurance and even income protection insurance.
The most obvious point to note when evaluating these risks is to do your homework and to get more than one professional opinion, as in most cases that one professional will have conflicting interests as they will be the real estate agent selling the property.