ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Excellent protection against inflation.
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Can be difficult to convert into cash.
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A specialized type of investment requiring study and knowledge of business.
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None of the above
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Detailed explanation-1: -The potential downsides of a REIT investment include taxes, fees, and market volatility due to interest rate movements or trends in the real estate market. REITs tend to specialize in specific property types.
Detailed explanation-2: -Real estate investments tend to have high transactional costs, especially in legal and brokerage fees. The process of acquiring a new property is also very long and tedious with lots of legal formalities. Another disadvantage of property investments is that they are not easy to liquidate.
Detailed explanation-3: -High Cost: The biggest disadvantage with real estate investment is the high capital requirement. To get started, you need to provide for down payments, EMIs, insurance, property taxes, stamp duty and so on. Given the high transaction costs, finding buyers and sellers readily is an uphill task.
Detailed explanation-4: -Data breaches. Housing market volatility. Employee injuries. Damaged or stolen business equipment.