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

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 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 is a valid concern as real estate is often seen as a long-term investment with moderate appreciation.

2. She might regret the purchase because she would not want to live on the property herself. - This is a valid concern especially if Skylar is considering rental properties or properties that do not align with her personal preferences.

3. She might lose her investment funds because real estate is notoriously risky. - Real estate investment does carry risks, including market fluctuations, property management challenges, and economic downturns, making this concern valid.

4. She might miss a better investment opportunity because real estate is not particularly liquid. - This is also a valid concern. Real estate transactions can take time, and real estate is less liquid compared to other investment types (like stocks).

Therefore, all of the concerns listed are valid in a real estate investment context.