Property investment is one of the investment instruments favored by many people. However, there are advantages and disadvantages of investing in property that you should know.
It is undeniable that investment in the property sector is arguably very lucrative. How not, the benefits of property investment are quite promising.
Many investors choose to invest in the property sector in order to secure their assets from the threat of inflation.
On the other hand, there are also disadvantages from property investment, so you must be wise in investing in property.
Advantages of property investment
Be physically visible
One of the advantages of property investment is that this investment can be seen physically. Unlike the case with stock investments that are not physically visible.
With such reasons, it is not surprising that property investment is in great demand by large capital owners.
Get more income
If you decide to invest in the property sector, one of the benefits you get is that you can get more income from this investment instrument.
The advantage you will get from property investment is that you can rent it out and make money from renting the property.
Thus, if you are successful in renting out the property, it is possible that you can generate a positive cash flow.
Another advantage that you get when investing in property is that this investment instrument has a low risk.
This is because the movement in property values is not as tight and sensitive as stocks. Under these circumstances, property investment is suitable for investors who do not want to take high risks.
A stable market
The property market is arguably more stable than other markets.
Thus, property investment is a promising investment for investors because it can return capital.
Property Investment Losses
It’s hard to sell fast
The disadvantage of investing in property is that you cannot sell it quickly. Unlike the case with stocks that you can sell quickly because the liquidity value is fairly high.
That way, if you need fast funds during an emergency and want to sell your property, chances are the sale value isn’t too high.
It takes a lot of capital to start property investment. Thus, you have to save money first so you can get started.
However, the benefits you get will be proportional to the capital you spend, even bigger
Expensive maintenance costs
One of the other disadvantages of investing in property is that you have to pay for maintenance costs, which tend to be expensive. Maintenance costs are risks that you must bear when investing in property.
For example, suppose you have to take care of your property in the event of something like a leaky tile, brittle wood due to being eaten by termites, and so on.
Those are the advantages and disadvantages that you face when deciding to dive into property investment.