What are "risk factors" in real estate investment?

In real estate investment, "risk factors" are defined as the various variables that can affect potential returns. This encompasses a range of elements such as market conditions, economic trends, interest rates, property location, and tenant demand. Each of these variables can introduce uncertainty into the investment, thereby influencing whether the expected returns will be realized and to what extent.

Understanding these factors is critical for investors as they help in assessing the viability of an investment and making informed decisions. By recognizing potential risk factors, investors can formulate strategies to mitigate them, enhancing their chances of achieving favorable outcomes.

The other choices represent concepts that are not inherently risk factors. For instance, assured returns imply certainty, which contradicts the essence of risk. Guaranteed lease agreements offer stability rather than risk, and local zoning regulations, while they can affect property value, are just one aspect of the broader category of risk factors rather than a defining element. Thus, the identification of risk factors centers on recognizing uncertainties that can impact the returns from a real estate investment.