Liquidity Risk

Liquidity Risk This is the risk that if the property must be sold quickly, the investor will have to accept a price significantly below market value. To achieve a "quick sale" in real estate, the seller usually has to offer a deep discount, directly eating into their potential return.Safety Risk (Market Risk and Risk of Default) Market risk is the possibility of a capital loss due to a decline in the overall market value of the property, caused by factors like a neighborhood decline or an economic recession. Risk of default in this context often refers to the tenant. The return on investment is entirely dependent on the tenant fulfilling their lease obligations; if the tenant defaults and stops paying rent, the investor's return evaporates immediately.