Ideally we all would like to know the amount of risk involved before making a decision.
That's why we evaluate the side-effects before trying out a new medication, check online reviews before eating at a restaurant or check a vehicle's motor history before purchasing a used car. It's safe to say that knowing certain information pertaining to risk helps us to understand what we're really getting ourselves into, especially as it pertains to investing in rental property.
Knowing the true risk of a rental property reduces losses even when unexpected events occur. Historically, commercial underwriters have approached the problem of assessing risk with a mixture of tactics such as: Examining prior losses, reviewing ownership information, and weighing historical property characteristics in addition to other external risk factors that may play a role, such as local crime rates.
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