How much of my portfolio should I allocate to illiquid property?
The appropriate allocation to illiquid property investments depends on your circumstances:
General guideline: Many advisors suggest limiting illiquid investments to 5-10% of your total investable assets.
Conservative approach: If you're risk-averse or nearing retirement, consider 5% or less.
Moderate approach: With stable income and other liquid assets, 10-15% might be appropriate.
Age consideration: Younger investors with longer time horizons can typically afford more illiquidity.
Income stability: Only increase allocation if you have secure, predictable income.
Liquidity needs: Ensure you have enough liquid assets for emergencies and planned expenses.
Total illiquid assets: Consider other illiquid investments (private equity, business ventures) in your calculation.
Never invest money you might need within the investment timeframe (typically 1-3 years).
Remember: These are general guidelines - consult a financial advisor for personalized advice.
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