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Property Investment in Brisbane Real Estate is better than Shares

Monday, June 16, 2014

 

Real estate and shares are often considered the two most popular investment options.

Both are long term investments.

The most obvious difference between the two is the amount that can be the amount invested - an investor in the share market can start small by buying shares worth a few thousand dollars whereas real estate investments generally involve a commitment of hundreds of thousands of dollars.

Of course, the fundamental objective of an investor should be to find an investment which generates maximum returns.

A small stock holding will not lead to an early and easy retirement unless that company enjoys an absurdly spectacular escalation in its share price. This rarely occurs. It can happen with mine shares when an unknown company strikes oil or gold.  Betting your future on finding such a company, at the right time, is simple gambling and not a sound investment strategy.

The stock market can be extremely volatile, and driven by sentiment rather than rational financial thinking.   In terms of today's share market, an investor needs to be financially well-educated and prepared to monitor their investment portfolio constantly or pay the often considerable price for professional management.

At times, there is only a very small window of opportunity in which to make the right decision about a share investment.

By comparison, real estate investment delivers the comfortable expectation for a well-chosen property of significant capital growth over time, combined with other attractive benefits which include:

  •     consistent rental income
  •     lower risk
  •     tax advantages
  •     the security of "bricks and mortar" and
  •     the capacity to manage and control your own investment   

The aspect of control is a very important consideration -- shareholders who supposedly "own" the company have no idea of what is really going on with the management of their investment and even if they did, they have no control. Property is a much more tangible option, and as the owner, you can see exactly what condition your investment is in.

But perhaps the best way to compare the two is ‘by the numbers’.

Let’s say you have $500,000 to invest in either Property or Shares.

 


The figures above speak for themselves, shares provide a superior net wealth increase BUT what happens when you take tax benefits into account?

 

 

 

When you take into account the fact that you can ‘borrow more’ or use more ‘leverage’ to invest in porperty the numbers change.

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