"Property rights" don't exist without the state to ENFORCE them. Or you have to create a system of vigilantes and warlords to keep the peace - which just devolves into despotism. Property isn't a tangible thing - it's an idea. There have been, and will always be "property disputes". Only a "central arbiter" can settle the matter. Unless you want to settle things with shootouts and clan feuds.
Sure, you can directly protect your home, but what about transferable title to land you're not occupying? How efficient will things be if everyone has to send armed units to secure land they just bought? If you contend that "free market security" will replace government mandated police and soldiers, then what's to stop a private armed group just grabbing your land and saying "free market, dude!"
I scoff at the idea of some of the more radical libertarians that we could have private "for hire" armies running around America, and due to the "free market" this will make EVERYTHING wine and roses, because those armies will have to "compete" to provide services. I'll tell you what, they WILL be competing - to enslave everyone else!
Contracts are only worthless paper without courts and laws to enforce penalties. If you say that people will "exact" their own penalties for contract-breakers, i'd have to wonder why contracts would exist in the first place. People would just take whatever they want in a "might makes right" scenario.