Pros and Cons of Property Investment


Financial professionals say your should diversify when investing, and one way to do that is to invest in property. Property investing has some definite pros and cons, and you should weigh all of them before deciding to commit to buying a property.

Lower risk

Investing in property can be lower risk than some other investments. One of the big reasons is that you are buying an asset that almost always appreciates in value over time. You also have control of the asset as opposed to a stock or bond, where you are dependent on the company that issued it. In those ways, property can be somewhat lower risk. Also, property will never become worthless as a stock or bond can. If you can't sell a house, you always can move into it and live in it.

It's expensive

One con to investing in property is that it is expensive. With a stock or a bond, you often can buy several shares for a $100 or less, whereas you need tens of thousands of dollars to put into a piece of property. Many people borrow money to invest in property, which adds finance costs to your investment. And you have the costs of improving and keeping up the property, which can add a lot to your investment.

It's not very liquid

When you invest in cash, you have your money available at all times. With stocks and bonds, you usually can liquidate in a day or less if you want or need to get your money. That's not the case with property. Even if you sell your piece of property in a day, it will still take a month or two to close the transaction, meaning you have to wait that long to get your money.

See Property investment Manchester for more information.