10 reasons why you shouldn’t invest in property through crowd property

1. You shouldn’t invest in property if you don’t have the money as it is a lot more risky to go ahead and invest in property than it to invest in something like shares. So, if you don’t have the money to invest in property, it’s going to be very difficult and you may not want to invest in property. You might want to pursue something else until you do have enough money.
2. You get a loan to invest in property. If you can’t get a loan for a property, it’s going to be very hard to purchase one. Properties are extremely expensive. if you don’t have a steady income, if you’re not full time or part-time, if you don’t have a business where you can show at least the last 2 financial years in terms of what you earn and you earn a decent wage, then it’s going to be very difficult to get a loan. If you can’t get a loan, you probably can’t purchase a property.
3. You shouldn’t invest in property if you don’t know much about the property. If you don’t know much about property, you don’t know about the process. You don’t know how to research an area. You don’t know about mortgages and this entire sort of stuff then, you may want to hold for a little bit. Start doing some education.
4. Cash is not very liquid when you purchase a property. When you purchase a property, you’re going to tie up a lot of cash as well as the debt that you’re getting in to into one asset. That asset isn’t extremely liquid, which means you can’t get access to that cash relatively easily. Your cash isn’t very liquid in property and in a lot of areas; it can take very long to sell your properties. In rural areas, it can be up to a year or more to sell a property. In city areas, it’s a lot shorter than that.
5. You need to go into a lot of debt to purchase a property. So this is one of the investment reasons you may not want to invest in property is that you need to go into a lot of debt. Now, debt can be great because you’re leveraging the money that you do have to buy a bigger asset, which if it grows, you can make more money. However, if the property goes backwards, you can lose a lot more money as well and you’ve got this debt that you now need to service. And if you don’t have high enough rent or if your property is vacant for a period of time, that can put a lot of pressure on you.
6. It’s expensive to buy and sell properties. When you’re purchasing investment properties, you generally need to pay stamp duty, as well as some other fees that go into purchasing that property. This is a government fee that you need to pay when you purchase the property, which can be quite significant in value.
7. It can often take years to see a return on your investment. The stock market can go up quite quickly or you could get dividends every quarter. It may take you years for your property to go up in value. Especially if you’re purchasing a negatively geared property where you need capital growth. You may be paying money out of your pocket every single month towards this property and it maybe 3 years or more before your property goes up in value enough that you can actually see some growth in your property. And it may be even more years before you can actually access that through drawing down on your equity or through turning your property into positive cash flow.
8. It can cost you money just to hold the property. Negatively geared properties cost you more in expenses than you are making in rent. Especially in some areas where the capital growth and the value of properties have gone up so much but rents haven’t kept up. It means every single month you’re paying money to hold an investment and you’re hoping that investment’s going to go up in value and offset those losses that you’re having.
9. Capital growth isn’t guaranteed. A lot of people talk about how they should invest in negatively geared properties or they should invest in capital cities because they’re going to get epic capital growth and you’re going to make hundreds of thousands of dollars, but that’s never guaranteed. There’s always the case that the property market may go down. There’s always the case that it just may stagnate and not grow at all. There’s always the case that you could overpay for a property. And so, even though it does grow, it’s not catching up to what you actually paid for it. And so, capital growth in your property isn’t guaranteed.
10. It’s expensive to get started into the property market. Sometimes, it takes years for people to save up a deposit in order to invest. And on top of the large portion of the money, you need to put in, which is going to be a big chunk of your savings. You’ll also go to have to get all of this debt so you can purchase something that is extremely expensive.

So, if you’re uneducated, you probably shouldn’t invest in property. You should get educated first. Now, it’s up to you to decide whether or not you think the property is for you or whether or not you should go out there and you should seek out another investment vehicle.