Identification of risks of investments into residential premises for rent in Poland

Abstract

While looking for investment opportunities, investors analyse whether a potential investment will bring satisfactory returns, the level of which depends on many risk factors. That is why it is necessary to analyse the potential risks in the process of investment management. The investors need to possess knowledge of such risks, their influence on the investment, and the methods of avoiding risk. Given the scale of investments into residential property, the focus has been on the risk factors determining the return on investment, which is crucial for a large number of small investors. Identification of different kinds of risks associated with residential premises is crucial for the management of such investments and translates directly into the level of return on the investment. The increase of the investments into residential property is caused by a number of small investors who are looking for an alternative method of investing. Their funds do not bring a satisfactory level of returns while in bank deposits. Those investors recognise the opportunity which arises from renting flats. The temptation of high returns compensates the level of risk.