Skylar is looking to purchase real estate as an investment using all of her available funds, but she has several concerns. Which of the following concerns are valid from an investment standpoint?(1 point)

Question

Responses

She might regret the purchase because she would not want to live on the property herself.
She might regret the purchase because she would not want to live on the property herself.

She might be disappointed because real estate usually offers modest returns.
She might be disappointed because real estate usually offers modest returns.

She might lose her investment funds because real estate is notoriously risky.
She might lose her investment funds because real estate is notoriously risky.

She might miss a better investment opportunity because real estate is not particularly liquid.

Answer 1

From an investment standpoint, the following concerns are valid:

1. She might be disappointed because real estate usually offers modest returns. - This concern is valid as real estate can sometimes provide lower returns compared to other investment options, especially in certain market conditions.

2. She might lose her investment funds because real estate is notoriously risky. - This is a valid concern. Real estate investments can carry risks related to market fluctuations, economic conditions, and property-specific issues (like maintenance and tenant issues).

3. She might miss a better investment opportunity because real estate is not particularly liquid. - This is also a valid concern since real estate transactions can take time to process, and selling property can be more complicated than selling stocks or bonds, which are more liquid.

The first concern about regretting the purchase since she would not want to live on the property herself is less related to investment validity and more related to personal choice. While it can influence her satisfaction with the investment, it does not directly impact the investment's performance or potential returns.