5 Biggest Risks Real Estate Investors Undertake

Florida real estate investors are well acquainted with risk. More often than not, the higher the risks, the greater the gains. While it’s impossible to know all risks upfront, there are several pitfalls that can trip up Florida real estate investors. The following are some of the biggest risks Florida real estate investors may encounter:

  1. Buying a bad property. No real estate investor buys problematic properties on purpose; however, there can be hidden problems that don’t reveal themselves until it’s too late. Hiring inspectors for everything from termites to mold and beyond can help Florida real estate investors avoid unpleasant surprises.
  2. Buying in a bad location. Every real estate investor knows location is key, but it’s not always easy to tell which areas will remain strong and which will wither. Florida real estate investors should look for certain markers of a healthy investment location such as population growth, job opportunities, and ratings for local schools. Positive markers in these areas usually indicate a good place to buy.
  3. Bad renters. Renters can be a nightmare for real estate investors if they choose poorly. They may make unauthorized partial payments or skip out on rent. They may damage or destroy the property. They may also irritate their neighbors. Thankfully, avoiding bad renters is as simple as performing detailed background checks on all applicants. It’s also a good idea to pull a credit report as bad credit can be a red flag.
  4. Limited liquidity. Owning real estate has the potential to turn stunning profits, but it lacks liquidity. If a real estate investor needs funds fast, they may find themselves in a bind as it takes time to sell properties. Florida real estate investors need to have an exit strategy in place ahead of time to give them the flexibility they need during a financial crisis.
  5. Florida real estate investors take on a significant amount of liability risk. Investing in the right kinds of insurance and making sure there are no gaps in coverage can help protect personal assets in the event of a settlement or payout.

Florida real estate investors have many risks to manage, and MMA Florida can help ease that burden. Our consultants have years of experience and wisdom that can help guide your insurance choices. Contact the experts at MMA Florida to learn how we can help protect your Florida real estate business from unnecessary risks.