Common risk factors include construction delays for under-construction properties, fluctuations in rental demand or achievable rent, illiquidity relative to financial assets, and the possibility that location fundamentals develop more slowly than anticipated.
Regulatory and documentation risks — unclear title, missing approvals, disputed ownership — represent another category of risk that thorough due diligence is specifically designed to reduce.
Acknowledging these risks upfront, rather than assuming real estate is inherently low-risk, leads to more careful evaluation and ultimately more resilient investment decisions.
