This is the dilemma of every aspiring property investor, especially given the recent turmoil in the real estate and financial markets and the backdrop of the 2008 financial crisis and the foreclosure crisis. Given the rising inflation, it is key that investors make the most of their investments using the right investment vehicle.
Picking the right investment channel, whether stocks or property, can help you ride out the storm of uncertainty. Grappling with the stocks versus share dilemma. Let us try and unweave the strands and see which option might most suitable for your circumstances.
In spite of the shock of the 2008 foreclosure crisis, properties are still a popular investment option for most people buying houses and apartments as an investment strategy or as an income generation tool through rentals. Property investment is generally a good option if you are looking at the long game, planning to hold onto your assets for a long time. In Australia, property prices have increased 3 fold over the past two decades. This capital growth along with rental growth makes property a very attractive prospect.
However, there are certain tax hurdles that may make property investments less attractive to some. In the recent years, there has been an increase in property taxes such as the stamp duties on certain property transactions as well as limitations on the ability to reclaim tax relief.
Owning property also comes with maintenance costs and a variety of fees and taxes such as stamp duty, council rates, insurance, general maintenance costs as well as corporate fees among others. These are not one-off but ongoing costs that will eventually add up to thousands of dollars.
People have this irrational obsession with acquiring property yet intangible assets such as shares can be equally safe and profitable investments. Investing in stocks carries with it lots of risks but with the right investments, it outperforms property investments. The value of a nest egg will rise or may fall depending on a variety of factors such as the company performance and the economic outlook.
With the right bets, shares can give you very high returns. Extrapolated over the long term, this is an asset class that will outperform most of the other investments. Stock investment is suited for a long-term strategy although you can also liquidate them over the short term.
Here are some of the reasons why shares make great investments.
It is very easy to invest: Unlike real estate investments that require significant capital outlay, shares investments are very feasible even with small amounts. There are a variety of analysis tools that you can deploy to easily research and make the right picks that will guarantee you great returns.
Stocks are liquid: Stock investments allow you to easily liquidate your assets and generate quick cash. You don’t have to wait too long for your investments to mature. You are able to cash in and get your money in only a few days.
Ease of access: Property investment is generally a costly and complex process requiring real estate agents, conveyance agents, property inspectors and a lawyer or team of lawyers to complete the transactions. Stock investment has a considerably lower bar to entry.