Disadvantages of investing in real estate

Expert Solution

Disadvantages of investing in real estate:

1.Legal issues:

Ownership of real estate may give rise to legal issues on account from those who come in contact with the property. The property owner can get a lawsuit and legal expenses if a person gets injured when a person falls off the property.

2.Maintenance cost:

Property ownership consists of a lot of maintenance cost such as repairs to the property, electricity and heating. Such maintenance cost can cause the property owner to incur losses on the property.

3.Property Tax:

Property investment requires the payment of property tax that can be significant. It is especially high in cities. It can cause a loss to the property owner when the amount of property taxes is large.

4.Debt

Since real estate requires a large investment, investors may not have money of their own to invest and take loans. If the tenant does not pay their rent, the property owner will be stuck making the payments on the debt.

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