Real estate is not liquid
It’s certainly a good idea to include real estate investments in your portfolio, as it can provide strong returns in the long term. However, we should not overlook the fact that one of the main drawbacks of investing in real estate is its illiquidity. It’s more difficult and it takes much longer to transform an asset into cash and cash into an asset.
While you can convert stocks into cash in terms of seconds, when it comes to property, it might take weeks, even months to sell and cash in. If you really need the money you invested in property for something else, you might be forced to lower the sale price to fire-sale levels to speed up the transaction. If you’re thinking short-term, you should definitely think twice before making any real estate investments, as they might not be the most profitable out there.
