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Real Estate Investment Risk

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Part 1: Real Estate Investment Risk

Many investors have become extremely wealthy by investing in real estate. Countless others have lost everything they had through investing in real estate. Real estate is a high-risk investment, but risks can be managed.

Investing in real estate or the real estate business is lucrative—it offers many prospects of making money. Do you agree with this statement? Why or why not?

Describe at least three major risks of investing in real estate or the real estate business. How can these risks be minimized or their negative impacts offset?

Part 2: FNMA and FHLMC

The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) play an important role in the secondary mortgage market. The FNMA is also known as Fannie Mae, and the FHLMC is also known as Freddie Mac.

Describe the roles of the FNMA and the FHLMC in the United States' housing and mortgage markets. How effective or ineffective have the FNMA and the FHLMC been in the country's housing and mortgage markets?

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Solution Summary

This solution discusses investment in real estate such as major risks, strategies to minimize negative impacts, roles of the FNMA and FHLMC and the housing and mortgage markets.

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http://www.realfuture.ch/anlagewissen_e5.html

https://www.americanprogress.org/issues/housing/report/2012/09/06/36736/7-things-you-need-to-know-about-fannie-mae-and-freddie-mac/

Describe at least three major risks of investing in real estate or the real estate business. How can these risks be minimized or their negative impacts offset?

Three major risks associated with investing in real estate include regional market risks, tenant risks, and financial risks. Regional market risks are placated upon the location of the real estate, which can be compromised if the area becomes crime ridden, degraded, etc. This is always a risk as others must maintain their homes and ...

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