Weakness or Risk of Property Investment
Even though it has many advantages, starting a property business also has risks.
If you fail to make a profit, or the location does not support, you could be stuck with the property forever.
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Whatever risk depends on your risk tolerance, that’s why some have the courage to invest in property and some choose other investment instruments.
Let’s look at the risks of investing in property before you choose to invest:
# 1 Occupancy Issue
The first risk when investing in property is the possibility of vacancies for an indefinite period.
If the house is left empty without a tenant, the house will usually break down quickly and be neglected.
The disadvantage of both is that there is no passive income as long as you own the property, so you could say that the house at that time was not an asset but only a liability (because you continued to pay installments but there was no passive income, resulting in negative cash flow).
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Generally, this vacancy issue is caused by 2 things, namely the difficulty of finding suitable tenants or because there are no requests for rentals in the area.
To fix this, try using several sites that can help you market your property (rent or sell).
This will make it easier for you to market your property on a site where visitors are looking for it.
So, you have to be patient in managing renting property investment, and it is recommended to have an emergency fund in case the house is always empty and in need of maintenance.
# 2 Its Less Liquid
Liquidity means that you can easily access money from the selected investment instrument.
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In other words, the more liquid an investment is, the easier it is to sell or exchange for money.
The disadvantage of property investment is that it is generally less liquid when compared to other instruments (like gold or mutual funds). So that many investors must think about the long-term impact, namely the money that settles.
You must go back to see how much risk tolerance you have from your personal characteristics and financial condition. If it is in accordance with property investment, then you can take it.
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Do not let you take a property investment but are not ready to tolerate the risk, which in the end result in loss or stagnant assets (money settles).
Property investment will take a lot of time to sell or turn a profit, so it can be a bad management strategy if you are not financially stable.
