Disadvantages of real estate investment

[Mike Jordan]

Disadvantages of real estate investment

1)There is no business barrier, it easy o get capital from the banks, so many competitors/people could do it, which means more supply. Hence,this reduce the profit margin

2) The procedure of real estate investment is simple, it is the oldest investment in the world, there is no technological secert or patent or business barrier for it. Again, so many competitors/people can do it, which means more supply. Hence,this reduce the profit margin.

3) Supply of real estate cannot be reduced, it is hard to destroy a property. Meanwhile, other investment like a backery, could be closed easily and the number of backerys ( supply) could be reduced. Thus, the supply of realestate will always increase or at least it will be constant, even if there is no demand for real estate. Please bear in mind that more supply means less profit.

This is not the case for other investments/businesses.

Therefore, these challenges shall be noted by any real estate investor.