Property vs. shares: making the right investment choice

When it comes to building wealth through investments, the age-old debate between property and shares continues to perplex many. Each option comes with its unique advantages and disadvantages. Today, we’ll break down the pros of both property and shares, helping you make an informed decision that aligns with your goals and preferences.

The pros of investing in property

Tangible Investment: Property offers the advantage of being a tangible asset. You can physically see and touch your investment, providing a sense of security and ownership.

Value Enhancement: With property, you have the power to add value through renovations or improvements, potentially increasing its worth over time.

Strong Rental Returns: Property investment can generate a steady income stream through rental returns, making it appealing to those seeking regular cash flow.

Benefit of Negative Gearing: Negative gearing can provide tax benefits for property investors, offsetting any losses against other income sources.

The pros of investing in shares

Hands-Off Investment: Shares require less hands-on management compared to property. You can invest in various companies without the need for active involvement in day-to-day operations.

Liquidity: Shares offer high liquidity, allowing you to buy and sell quickly without the complexities associated with property transactions.

Strong Dividends: Many established companies offer dividends to their shareholders, providing an additional income stream.

Franking Credits: In certain countries, such as Australia, shares benefit from franking credits, which can lead to tax advantages for investors.

Considering market trends

Market trends can significantly impact the performance of both property and shares. In recent years, we’ve seen smaller properties, like one-bedroom apartments, not appreciating in value as much as larger properties. Similarly, the stock market experiences ups and downs, affecting the returns from shares. It’s essential to research and analyze the current market conditions before making a decision.

The numbers game

Over a 20-year period, research indicates that property has outperformed shares by a mere 1%. This marginal difference highlights the importance of considering your personal interests and preferences when making an investment choice.

The best of both worlds

While the property vs. shares debate is compelling, it’s worth exploring the possibility of having a diversified portfolio. Combining both property and shares can offer a balanced approach, spreading risk, and maximising potential returns. Having a mix of investments can provide stability during market fluctuations and cater to varying financial goals.

Ultimately, the decision between property and shares comes down to your individual circumstances, risk appetite, and long-term goals. Each option has its merits, and there is no one-size-fits-all answer. To make the best choice, consider seeking professional advice from a financial advisor who can guide you based on your specific needs.

 

Get our Complete Guide to Selling Your Property here.
View our listings here.
Learn more about Stuart Howard here.
Meet Marriott Lane sales and property management specialists.
Scroll to Top