What is a major disadvantage of owning investment property?

Owning investment property indeed comes with several advantages, but a significant disadvantage is the lack of liquidity. Liquidity refers to how easily an asset can be converted into cash. Real estate generally does not have the same level of liquidity as other investments, such as stocks or bonds. Selling a property can take a considerable amount of time and involves various steps, including market analysis, listing, negotiating sales, and completing closing processes.

This means that when an investor needs quick access to cash, they may face challenges with their investment property. There can also be costs associated with the sale, such as real estate commissions and taxes, which further complicate quick conversions to cash. Hence, while real estate can be a valuable long-term investment, the lack of liquidity is a serious consideration for investors needing immediate funds.

In contrast, high appreciation is typically seen as an advantage, as is the availability of tax benefits associated with many real estate investments. While income stability can be an attractive feature of certain investment properties (especially those that are rental properties), it does not necessarily outweigh the liquidity issues that come with ownership.