You might have heard of the things that make property business such a very enticing business department to dive into, but do you know that such
Sure it got a nice ring to it, but there are several things that can turn a property business a hellish thing to dwell in. In today’s article, we are going to talk about just that: the cons of running a property business. Without further ado, let us begin talking about the first thing:
It is expensive to start
In case you did not notice from the title, this guide is made for novices in the world of business. Because novices often do not have that much money to begin with (unless they have inherited a massive fortune from someone they know), a property business is not a business that every novice should/can start with.
Why? Because it is darned expensive, that is why. To conduct a property business, you would need to have a property first. Thanks to how the economy works in our world, lot prices will always increase with each passing day. At first, you might get a spot of land by paying a few thousand dollars. On the second day, you might need to pay a bit higher than that. On the next year, the price might jump into the 10,000 range. The year after that, the price can go up to 100,000 and so on.
Unless you are the first player, you will get the land for a small sum. These days, no one is hardly a first player anymore, so you would need to pay a large sum just to get a piece of land. Not to mention the cost to renovate or to build your property, which will definitely add to the overall cost.
Minimal chance of risk, but if something did happen to your property…
You will lose every fortune you have spent buying and building the property. Properties will always increase in price, but what if something happened to it? What if a sudden tornado strikes the property down? That way, the money you have spent in building the property will go to waste. The cost of rebuilding it will be high, and there is a chance that the price for the lot will go down thanks to the tornado. Sell it and you will not be getting any profit.
Lastly, it is pretty complex
This should not be a problem if you are good at calculating risk and a whole other mathematical and prophetical mumbo jumbo. If you are not, then be prepared to face losses and unmitigated risks. You would need to be able to do a lot of calculation and risk management here. In property business (and whole other businesses out there), uncertainty is a businessman or businesswoman enemy, and you would need to have a bit of skill to combat uncertainty.
These three reasons are the major reasons why the business is not a good thing to start with. Sure you can start with a property business if you want to be a business mogul, but if you do not have the money, the skill, and the sufficient risk management system, you are better off starting your own startup company.