There is no perfect type of investment, no investment without a risk. Similarly, it happens to the investment in the form of property. It is true that having property as your investment will be very helpful for your financial supply in the future. Although it is said to have a lot of advantages, yet it turns out that investment property also has a number of drawbacks that can potentially cause loss to the owner. Here are some disadvantages of property investment :
1. The low property liquidity
Property is very easy to sell because the demand for property is always high. However, when the property is going to be sold, the seller often takes a long time to prepare. Additionally, if you need the cash funds from the sale of your property, you will need a long time to market it, except if you make your property as collateral of a loan on a bank. It is different from stock, automotive, and gold investment in which the price competition can be monitored by the buyer. It takes about two months to sell the land or house. This is the fastest estimated time. As for the office, it takes about nine months to sell. And that’s with the requirements that all the necessary documents are complete.
2 Big funds needed
This can lead to low liquidity properties. The reason is, to get the property, you need substantial funds include costs for maintenance and renovation.
3 The need of care / maintenance
As the property owner, it is a a must for your to perform maintenance on your property. The goal is to keep your property values high. Just imagine if your property is less maintained, the resale value will be low. The property maintenance efforts include renovation, painting, cleaning every corner of the room, trimming weeds in the home garden, roof maintenance, replacement of damaged equipment, and many more.
4 Government regulation issues
When starting doing the property transaction, then that is the time the government regulation on property begins. For example, the matter of taxation. Not to mention the regulations concerning spatial and urban planning that must comply with the various rules and regulations. You will also mess around with complicated licensing process and strict. Some of these regulations are a form of government’s control in the property business, which sometimes feels burdensome for property business doers.
5. Great risk
You need to know, there are two causes of property at a great risk; the property crash and force majeure (events beyond the control). These two points can cause losses to property owners. In addition, those two points may also cause the value of the property low and even obsolete.
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