I have been thinking whether I should invest in private property in the future. After giving some thoughts on it, I realized that it is not a wise choice for me to make. I have listed ten reasons why I am not interested in investing in private property.
1) Buying and selling Stamp fee (these add up to a huge amount)
2) Illiquidity (cannot be sold easily)
3) Cannot be diversified (can only buy one, cannot do averaging)
4) Need to leverage (definitely need to take loan)
5) Maintenance fee (this will take away money each month)
6) Agent Commission (can be a huge amount)
7) Finding Tenant (difficult to find a good tenant that will take good care of your property)
8) Unpredictable Loan interest rate (interest rate may increase when market picks up)
9) Cannot grow in size (definitely the size of the property cannot increase)
10) Unpredictable events (you can never know what will be built beside the property)
