Which is the better investment? Should I go invest in property or shares?
Many are still stressed about what to choose between these two. But who weighs the most in terms of long-term benefits?
If you’re largely considering the safer and traditional way of growing your wealth in Australia, property investment would be the best and smart choice.
Why? Compared to investing in shares, the leverage you can get from buying an investment property makes it the clear better option. Not only that, having the equity from your home by making principal repayments off your mortgage will be possibly granted over time when you invest in property. This then can be potentially used to purchase more homes, which can, later on, expand your investment portfolio.
But who among them did really perform better, historically?
Based on the ASX and Russell Investments’ report released in June 2018 which examined the returns of long-term investments, better gross returns were seen in residential investment property from the 20 years to December 2017. From this timeframe, Australian residential property’s returns averaged 10.2% p.a., in contrast with Australian shares which averagely received returns of 8.8% p.a. only over the said period.
Michael Sloan of Better Homes and Gardens Real Estate once said:
“If you have $100,000 of cash or equity in your home, you can buy a $400,000 investment property. So, assuming you buy a quality property and stay away from student accommodation and the like. What is going to deliver you a better return long term? A $400,000 property or $100,000 of shares?”
To sum up, property investment is a much safer investment than shares. With it, you can use equity to build your portfolio without more capital needed, and with that, property investment could be a worthy investment strategy for you. Nothing else.
