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How does property compare as an investment vehicle compared to other forms of investment?
This is an adjunct to the previous discussion on Australians obsession with property.
Many people invest in property as almost a default. There are many other alternatives out there like shares, managed funds, EFTs etc.
What are the advantages and disadvantages of property as an investment compared to other forms of investment and why do so many of us buy investment properties?
Many people invest in property as almost a default. There are many other alternatives out there like shares, managed funds, EFTs etc.
What are the advantages and disadvantages of property as an investment compared to other forms of investment and why do so many of us buy investment properties?
Views: 2
Replies to This Discussion
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Permalink Reply by JG on -
For retirement investment can anything beat the current tax treatment of super?
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Permalink Reply by jacquesk on -
Hi JG
Agreed. My only issue is a mistrust of govt of all flavours that between now and retirement that the rules will change. Some govt sooner or later may see if as a convenient cash cow.
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Permalink Reply by JG on
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The thing is they're relying on Super to bail them out of having to raise the pension.
So messing with the super as a cash cow would be very dangerous to any government.
A pension rise would need rivers of gold to fund it.
The minor issue of those stuck on the pension needing to eat dog food to survive is something all parties are hoping will go away.
But I agree that putting trust in princes is rarely advisable.
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Permalink Reply by jacquesk on
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Mmmm Machiavelli. Having a political system that, being a cynic here, does not see far beyond the next election or budget makes me very suspicious. Changes to superannuation would be done in small increments that would add up over time. I do pay extra pre tax into my super but I do not solely rely on it to keep on a dog food free diet in my dotage.
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Permalink Reply by John on -
Property verses?
I saw a strange property advertisement (verse) in the weekend paper
Under a photo of the agent it said "Slap and Tickle"
Who can take that person's property seriously?
On the subject of versus other investment...
...well, I am renting until the market bottoms again. Perth is cooked. My money is safer than houses.
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Permalink Reply by Natalie Bochenski on -
Glad to hear there's still good raps for super! It's going to be a while before I can really crank up the share portfolio!
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Permalink Reply by jacquesk on
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Hi GirlClumsy
If you want a very cheap alternative to shares Members Equity have some managed funds that have very low entry fees ($200 or so). Does not appear to be much info on their web pages though.
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Permalink Reply by Mary M on -
I suppose one of the biggest drawbacks is having "all your eggs in one basket" - while the analogy is a stretch, would you sleep easy if you had all your hard-earned in one stock?
Probably not. And while the home has obvious advantages over owning a piece a paper (share certificate, if they still exist), it is still subject to market movements, both up and down. The difference is that you don't get your property valued every day. I think we'd all get a bit of a fright if we did!
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Permalink Reply by jacquesk on
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Hi Mary
I found some old paper share certificates the other day. Pure nostalgia. It is all electronic and I prefer it that way.
I agree with the eggs in one basket analogy. You can have a couple of duds in your portfolio and survive but one bad tenant, fire, or other accident can mess the finances up a lot.
Another objection to property over shares is that with a share portfolio you can realise part of the portfolio if you need $$ whereas with property you cannot flog off the spare bedroom. If you are lucky you may be able to realise any equity you have in the property but that would depend on whom you have your mortgage with and if you have made extra payments etc.
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Permalink Reply by Bandwidth on -
When investing in anything insurance is a must and should be considered when calculating return. As far as bad tenants, fire or other accident, as a property investor I hope the damage is major that way I get a new property.
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Permalink Reply by jacquesk on
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Hi Bandwidth
I am not sure what insurance exists for share investors. If there is some I would like to know what it is and how it works. At the moment I work on the premise of bearing sole responsibility for my investment decisions.
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Permalink Reply by Miffy on -
Hi jacquesk, there are a couple of forms of "insurance" with investing that I know of.
1. Protected equity loans
2. Short-selling over shares or options
3. Stop losses or guaranteed stop losses over CFDs
I'm sure there are others out there too. Anyone know of any?
As with any form of insurance, you've got to weigh up the benefit of having it versus the cost of the "insurance" itself.
Miffy
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