WHY PROPERTY AND NOT SHARES?
When it comes to investment options most people seem to choose property as their preference.
Here are 7 reasons why...
1. Property is tangible & Australians love property
Meaning it will always remain popular whereas the volatility of the share market scared many investors away. In Australia almost 70% of us own our own home and recent surveys show a huge number of Australian are considering purchasing an investment property over the next few years.
You can touch it, see it and yes — live in it – and people like the security associated with property. Additionally, everyone understands residential property — they have either owned, rented or lived in a home.
It’s familiar and things that are familiar naturally feel safer.
2. You can add value to your properties
By adding value to your property, through buying well or through renovations, strata titling or subdivision you can accelerate its rate of capital growth.
3. Property is a fundamental human requirement, but companies (and their shares) come and go
Everyone needs a roof over their head, whether they rent or own their own home.As a basic necessity, housing will always be in demand – it will always have value because we simply can’t live without it, which gives property the advantage over shares with less risk and greater stability over time – in other words, property is as “safe as houses”.
4. Property can be leveraged
No other investment vehicle provides you with the opportunity to leverage up to 95% of its value in order to acquire more of it as a part of your portfolio.
Not only that, if the value of your property investment falls (as may happen in the downward phase of the cycle), the bank don’t come knocking on your door asking for their money back as they do with margin calls on shares (unless of course you can’t meet the repayments).
Even better, once you own property, you can leverage off of the growing equity you have in it to buy even more property.
5. Property has a proven rate of return
Property is a proven stable strong investment.
When you can look back over ten, twenty, thirty, even fifty years, you get a picture of exactly how strongly property has increased in value over time.
6. Property values are less volatile than shares
Think about it…residential property is the only investment market not dominated by investors, and this effectively gives investors a built in safety net.
Even if all the investors were to leave the market at once, it would not totally collapse.
7. Property is more tax effective than shares for investment
When you set up your property investment business, a raft of legal tax deductions (I like calling them loopholes) open up to you.
Still need convincing?
If you look at the results others have achieved, you have to say that property makes pretty good investment sense.
According to the BRW Rich 200 list, property has consistently been the major source of wealth for Australia’s multi-millionaires.
And it’s the same all over the world. Those that haven’t made their money in property generally invest their surplus funds in real estate.
The property market is now in a more mature phase of its cycle so be careful — not all properties make good investments, however now may be a good time for you to get into the property game.