Surely there will be many of the advantages when investing your money in property. However, we should also aware that the investment itself may have some disadvantages that you probably missed or never cross in your mind before. Investing in property has been done for a long time until today, and through the knowledges and experiences, we sometimes found what we need not to hear related to this business field. So that, I have prepared some of the weaknesses in property investment.
By knowing the weaknesses in property investment, I hope not to stop you in investing in this business, instead, I want you to getting know all the disadvantages and could prepare one or two prevention actions to get out of what that might makes you broken the bank. You know that it will takes a lot of money for the investment, so you’d better prepare yourself.
5 weaknesses in property investment
Actually, there are many of the weaknesses than just the 5 lists that I would like to share. But, I will only sum it up as the general weaknesses that may happen to every investors out there, including yourself.
1. Management burden
So now you have got a property in your hand, right? The thing is, if you are not selling or renting it in no time, then you will have to taking care the building either will be maintained it yourself or using another service. The thing is, no matter what you have chosen, you still need to spend some amount of the money. If you are expecting that the price of your property will always be rising, then you should also know that it will be achieved only if you are keeping the building at its best.
2. High cost transaction
You have known this before right? This is actually will be the first weakness in property investment for many of us. The property price could even make your savings out of stock. Not to mention the fee for the property broker, taxes, and many more. High return investment comes with the high price as well.
3. Time consuming acquisition
You have known what you need when investing the money in property, but doesn’t mean that you will get one sooner as you have wished. Buying property will take more of your expected times, it could be weeks or even monthly. What if that would be in yearly? That is possible as well since the property itself is lack of liquidity.
4. Building depreciation
Your property may have been built on the expensive ground and at the prime location. The ground or land price may will be rising all the times because of its scarcity, but not with the building on it. The ground could be forever in ages rather than the building itself that may only lasted for 10, 20, 30 or 50 years old depending on the materials quality and the standard of the construction robustness.
5. Physical hazard
If we are comparing the property investment with any other type of investments, we realize that the property will risking us in destruction of the ground and the building itself caused by the earthquake, land-slide, and many more natural disasters. Although, you still can anticipate it by registering the property for the insurance.
That’s all the 5 weaknesses in property investment that I know so far. They are not to scare you at all. Simply just the same as I have told you earlier which is to make yourself ready for the worst situation you may experience in your investment.