What is a key consideration for investors when assessing risk?

A key consideration for investors when assessing risk is the potential for loss. Understanding the risk of losing money on an investment is crucial because it directly impacts decision-making. Investors need to evaluate the likelihood of losing their capital compared to the potential gains. Evaluating risks involves taking into account various factors that could affect the performance of the investment, such as market volatility, economic conditions, and property-specific challenges.

While the expected return on investment is important, and overall market trends can provide context for investment decisions, the potential for loss is fundamental to evaluating overall risk. Knowing how much an investor could lose allows them to strategize and implement risk management techniques, enabling them to make informed decisions that align with their risk tolerance and financial goals. Assessing the number of properties owned is more about diversification and portfolio management rather than the direct assessment of risk for an individual investment.