Multiple choice

The biggest disadvantage of investment in real estate is

  1. less potential appreciation

  2. high purchase price

  3. depreciation in value as time passes

  4. value gets eroded due to inflation for capital
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The biggest disadvantage of real estate investment is indeed the high purchase price or entry barrier - buying property requires significant capital, making it inaccessible to many investors. While real estate can appreciate, the high initial cost is the primary constraint. Options A, C, and D are incorrect - real estate has good appreciation potential, generally doesn't depreciate in value over time (unlier some assets), and often acts as an inflation hedge.

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