Investing in real estate carries inherent financial risks, including market illiquidity, interest rate volatility, property value fluctuations, and unexpected maintenance or capital expenditure costs. Unlike liquid equities, physical real estate cannot be sold instantly without potential price concessions. Additional risks include tenant default, localized economic downturns, vacancy periods, and regulatory or zoning shifts. While real estate offers strong long-term appreciation and cash flow potential, successful investing requires rigorous due diligence and risk management.