Risk Management

Question 1

RICS Guidance?

Answer 1

RICS Management of Risk

Question 2

What is the purpose of the management of risk guidance?

Answer 2

Notes the general principles of risk management and provides practical applications and considerations for successful implementation

Question 3

What are the categories of risk noted in the management of risk guidance?

Answer 3

• Risk Avoidance
• Risk reduction
• Risk transfer
• Risk sharing
• Risk retention
• Interrelationship of risk

Question 4

What is an uncontrollable risk?

Answer 4

The client and project team have no control over the event occurring or its impact.

Question 5

What is an influenceable risk?

Answer 5

• The client and/or project team have a degree of influence over the probability of the event occurring and its impact

Question 6

What is a controllable risk?

Answer 6

• Client:
  o The client has control over the probability of the event occurring.
  o The project team has no influence over the probability of the event occurring or its impact.
• User:
  o The client and the project team have joint control over the probability of the event occurring.
  o The client has control over the impact of the event.
• Project:
  o The project team has control over the probability of the event occurring.
  o The project team has control over the impact of the event.

Question 7

Can you explain political risks in relation to your profession?

Answer 7

• Political risks, in my profession, generally refer to changes in regulations, tax laws, or political stability that might affect the business or project we are handling.
• These risks can significantly influence market trends and the profitability of our investments.
  o Therefore, it’s essential to keep a close watch on regional and national politics, understand its possible impact, and be ready with contingency plans

Question 8

What are the key measures addressed in Surveying Safely: Health and Safety Principles for Property Professionals to manage risk?

Answer 8

• Understanding and implementation of safety regulations, risk management strategies
• Carrying out safety audits and surveys
• Continuously educating and training the team on safety aspects

Question 9

How do you manage liquidity risks in real estate?

Answer 9

• Maintain sufficient cash reserves for emergencies and adjust the investment strategy according to market conditions.
  I also diversify the portfolio to reduce dependence on a single asset and continuously monitor the market to predict possible liquidity issues.

Question 10

Can you describe how tenant and vacancies factors contribute to the risks in real estate?

Answer 10

• Tenant and vacancy factors definitely contribute to real estate risks
• A lack of tenants or high vacancy rates can result in lost income and lower return on investment
• On the other hand, tenant-related issues can also impact reputational risk. So, I focus on maintaining a balanced and diversified tenant portfolio and devise effective marketing strategies to minimize vacancies.

Question 11

What strategies do you use to mitigate the risk of property depreciation?

Answer 11

• To mitigate the risk of property depreciation, I ensure regular maintenance and upgrades of the property, and keep it up-to-date with market demands. I also pay special attention to selecting properties in locations with growth potential and study market trends to make informed decisions.