During the period of the property investment changes may take place to the:
- Market value of the property
- Expenditure on the property
- Returns on the property
The consequences of such charges are:
- Asset risk
- Repayment risk in cases of external financing
- Liquidity or insolvency risk
- Personal income and financial circumstances cannot absorb (any more) changes in value or changes in operating revenue
- Resultant divestment
In order to prevent such risks, hedging is essential with regard to:
- Property investments
- Personal circumstances
