Discussed here is limited to investment, purchase their own homes is not in the class discussion list.

(Translated by GOOGLE)

Contact the years more and more real estate investor. Among them, some people really insightful and vision, for the consideration of risks and benefits of more mature, with them I also learned a lot of things. There are also some guests, although also the investment, but basically just blindly follow the trend, not a deep understanding of risk. For example, the sovereign of this line to see some of the buyers, and even sell what it did not clear, but also to see so many people lined up to come inside, and even buy a flower in front of thousands of locations. From this perspective, this is not part of the people do not belong to a sophisticated investor with risk tolerance.

Real estate investment, compared to stocks, funds, futures, gold and other investment vehicles, has the longer duration of use of funds, the amount of large, slow cash fund, the characteristics of the lower rate of return of funds, which are low risk and low rate of return of investment categories.

The greatest risk real estate investment what is it? Is a falling house prices? Is the sell? There is no rental income in return?

These are only the surface of the performance risks, the biggest risk is that house prices fell sharply in their economic ability to support the time and had to sell but can not be sold live, then cause the foreclosure situation, as the financial crisis in the United States.

So, how to properly measure your risk tolerance for real estate investment capacity?

The first is economic strength. Real estate investment funds, if in the case of crop failure, how long can they can not support the flesh? My view is that at least 5 years. That is, whether it is worth mentioning home buyers to spend is worth mentioning existing homes to buy the land, where the funds should be placed at least 5 years, he will not panic.

Second, is the psychological endurance capacity. This can be a good one can say much. Just bought a old house renovation plan, the market to turn down a U-turn; or a pre-bought only a few days, the developer announced the price. How to do? How to face? Both to the security of. Learn as much as possible before you buy, do more homework, once made a firm decision will leave. Just like those stock market is doing, if it is to do day trading, and most of them are lost earn less.

Finally, before making a decision whether to understand clearly what the risk is that they can afford and what is the bear. For example, developers are likely to hand over 期房 suddenly announced price increases; for example, the developer may sell a portion of the Forward House announced after the price cut for the rest of the Forward House, while the price cut and very handsome; for example, transfer 期房third-party for various reasons did not complete his contract, then, becomes the contract must be completed; for example, the adjustment of loan rates and policy making financial arrangements for the original problem can not be out of credit to the original amount; and so on and so forth.

(Views of the author only and does not constitute investment advice.)