why property investment is better than shares !!

| September 10, 2010

 

Investing in the property market is an effective wealth creation strategy and method that many Australians use to get ahead financially and secure their future While managed funds and shares and other type of investments also offer opportunities to increase your wealth, some experts will say that real estate is your best bet in the current market.

 

property investment  versus shares

 

Property Vs shares

 

There are so many reasons to invest in property, including the fact that you’re buying a real and tangible asset (an actual bricks and mortar asset ) which will be always be in demand and can be sold in the market . Stocks and companies and shares, on the other hand can lose all of their value in a day or even get liquidated or closed down. We all have l heard the horror stories, of companies falling over an stock market crashes and your money disappearing in a flash.

 

But as long as there is an increasing population, people will always need a place to live in , which makes property a more stable and attractive option.

Why property investment is better than the stock market and shares investment

 

Receive possibly two income’s

If you plan your investment right, you could have two income sooner than you think. A property bought at a lower price in a mining area or a area that has suddenly shot up in value will possibly put you into positive gearing and earn you a second income. When you purchase a property at today’s market value, while you hold the investment it is likely to increase in value over time, due to a favourable economy, and population growth. However, you don’t need to sell this asset to make money, you can continue to earn income from the property while you hold it and leverage of it if you want to make further investments or then just keep renting it and let it increase in value

 

Leveraging and using your property to grow

Property as an asset is much easier to leverage when compared with other investment options like shares due to its volatile and rapid share market fluctuations and volatility. Banks are generally comfortable to lend more for property than a share portfolio as they consider it as a low-risk investment option, and they’re also confident that they can recoup the cost as prices for property and land have historically only gone up wards.

 

Gain from your tax refund and save money

An investment property is tax deductible, so the Australian Taxation Office (ATO) will allow you to claim a tax deduction for most of the expenses you incur when buying and managing your investment property. If you experience a financial loss from this property. Which means that the yearly costs of owning your investment property exceed the annual rental income you receive – you can offset these losses against your income tax.

This strategy is known as negative gearing. Normally, you would receive this tax amount back at the end of the financial year when you complete your tax return, but it is also possible to receive this money in your regular pay thus giving you the added advantage that you need not even pay the difference in the mortgage repayments and rent amounts received. In other words, you can receive the tax saving during the course of the year to provide better cash flow for your daily expenses.

 

Long-term investment rewards for property Investment

Property values sometimes fall slightly in the short-term, but historically over the long term it always increases in value. It is also less time consuming as investors don’t need to keep up to date with daily share markets

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Category: 2010, investment property, Investor, negative gearing, Property Market

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Property man writes articles related to property , stock market and finance. if you like what you see do bookmark the blog and leave me a comment

Comments (4)

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  1. Hi, thanks for a great article. I agree with you that property investing is a more solid and dependable choice than shares.
    Also, you mention positive gearing. One way to make your property investment cash flow positive is to look at the benefits of the Shopping Christmas australia program.
    This government scheme offers significant tax offsets to investors who rent their property out at lower than market value. In many cases, this is sufficient to make the investment cash flow positive.

  2. Great post: you’ve got some great content there! I agree with you that property investing better than shares. I am a property Investor myself and agree with what you outlined in this article. It’s good to see someone with the same opinion as me on this topic.
    Property Investment Coach

  3. Cheers for useful content in your blog why property investment is better than shares !! | Australian Property Market.
    .
    Regards…

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