You can lose money making investments. Real estate does not always go up in value. The real estate downturn of 2007 proved this to a lot of people.
There are risks of liability with real estate investments, particularly when you have tenants. Real estate investments have more risks than some other investments. Mold, lead, meth, asbestos, property boundary disputes, aluminum wiring, blocked fireplaces, earthquakes, mudslides, wars, malfunctioning smoke detectors, building code inspectors, water quality or quantity problems, bad tenants, bad pets of tenants, bad neighbors, declining neighborhoods, declining cities, litigious tenants, foundation problems, soil problems, zoning violations, setback violations, underground storage tanks, changes in laws, and failure to understand landlord-tenant laws, are just a few examples of many things that can ruin your investment. Environmental issues are particularly bad because a problem created by a previous owner or someone else can create liability for you even if you had nothing to do with creating the problem.
Additionally, real estate investing with leverage is riskier than non-leveraged investments. Leverage cuts both ways. When values go up, you win bigger than with no leverage. But when values go down, you lose bigger than with no leverage. If you are not in a financial position to withstand possible loss, you should not invest in real estate.
I am not making guarantees, just providing ideas. Use the information here at your own risk.
Any predictions you see in these pages (whether my own or someone else’s) should be handled with caution. Think critically, consider pros and cons, and make your own decisions. Do not blame me if, in hindsight, you made the wrong decision. Nothing here should be considered as legal, financial, accounting, tax, investment, or professional advice.
A book entitled Thinking Fast and Slow considered 284 predictions made by political and economic experts. The experts performed worse than they would have if they had simply assigned equal probabilities to each of three potential outcomes. I am not an economic expert so my predictions may be even worse. I try to provide opposing views, please decide for yourself which predictions make the most sense.
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