Shares vs Property

[Ghostwriter]

What is the best investment, I prefer shares but a lot of ppl I know are property mad, I think shares are much easier to divest from in emergencies, and need less money to start.
What are ppls preferences?

 

[bunsen burner]

property easily for me

 

[Ghostwriter]

property easily for me

Can you expand on that BB?, I own my house outright and am now pumping money into super and Shares, am thinking about another property but I think it is a slower growth than sharemarket.

 

[bunsen burner]

Can you expand on that BB?,

Main reason is personal interest. Property interests me, shares don't. Property is also conceptually much simpler. There's not that much to know and hence easier and quicker to get a handle on. Shares is so diverse.

I also like:

1. Less risk with property (mostly)
2. higher borrowing capacity

I own my house outright and am now pumping money into super and Shares, am thinking about another property but I think it is a slower growth than sharemarket.

Overall there's little difference. Property peope will show you figures and stats that show traditionally property has better growth and shares people will show you stats and figures backing shares as better long term growth. Given it's 6 one way and half dozen the other this shouldn't be a factor in which way you go.

What's important is using a strategy you enjoy learning as well as entering the market at the right time.

At the moment property isn't doing a lot. Perth and Darwin are too risky given they're probably near the peak of the cycle and are likely to correct resulting in possible losses. Sydney and Melbourne appear to be at low points but will take a coupe of years before seeing good growth.

Given that IR rates may still go up it's a hard choice whether to play safe (keep pumping after tax dollars into shares) or to take a risk (get a loan, buy a property, and use those after tax dollars to service it). (I assume you're not borrowing or margin lending for shares)?

The advantage in property may be this (depending on your circ):

You use equity in your PPOR to fund an investment property (say $40k). This is secured by your PPOR (essentially your home loan just goes up by $40k). You get a new loan secured by your investment property (say $160k). You buy a $200k property (inc stamp, costs etc).

So you basically have a $175 asset that costs maybe $14k pa. The diference is you get growth on $175k rather than growth on $14k worth of shares (uness of course you plan to lend to buy shares). Then it's just a matter or not whether you get the growth. The longer you hold it the more assured you are of getting good growth.

 

[bunsen burner]

Jozeph:

Can I ask what strategy you're using?

I get the impression you're getting any spare money and sinking into super or buying shares with it?

 

[Ghostwriter]

What if I buy a property and can't get anyone to rent it or a group of outlaw motorcyclists rent it and set up an amphetamines laboratory and refuse to pay rent?

 

[Ghostwriter]

Jozeph:

Can I ask what strategy you're using?

I get the impression you're getting any spare money and sinking into super or buying shares with it?

Thats correct.

 

[bunsen burner]

What if I buy a property and can't get anyone to rent it

If you do your research correct then this won't be a problem. Only buy in areas that have a vacancy rate of < 3%.

I've been untennanted for less than 1%.

or a group of outlaw motorcyclists rent it and set up an amphetamines laboratory and refuse to pay rent?

As long as they pay you in meth (equivalent wholesale value) then you're on a good thing.

 

[bunsen burner]

Thats correct.

A better strategy than maybe 95% of the population, ie better than not investing at all, better than putting money in the bank, and better than buying osterich farms.

You're doing ok but you need to step up and learn about leverage. Can do with both shares and property but I think property has an advantage here.

The property leverage example is above (use equity in PPOR (primary place of residence) for 20% deposit, borrow 80% balance, and pay in back using rent with the shortfall coming from what you are currently buying shares/super with).

You can also borrow to buy shares. The disadvantage being lenders won't lend 80-100% like they will property, and if you fall under your LVR you get margin called - which means the lender rings you up and asks you to deposit cash with 24hrs to make up for the loss.

Margin lending is just one share strategy. Other good leveraging strategies are options and CFDs. Require a good kitty (say $50k) to get started and is much riskier than property (potential higher returns but potential higher losses).

You need to ask some people about some share strategies. Pay particular detail to their length of experience, success rate, start up float etc. You sound like a pretty limited risk guy so you should be looking at buy and hold strategies via leveraging with either shares or property

You also need to read some books.

 

[Barry Zuckercorn]

Shares by the proverbial. Property is IMO very overrated. Most people like property because they can see it and touch it... It's a psychological thing. It has to be if you consider that in the long run shares are gonna have a better return 9/10 times.

 

[bunsen burner]

Shares by the proverbial. Property is IMO very overrated. Most people like property because they can see it and touch it... It's a psychological thing. It has to be if you consider that in the long run shares are gonna have a better return 9/10 times.

pure crap. talking out of your arse.

 

[Barry Zuckercorn]

pure crap. talking out of your arse.

Relax mate. You can invest in anything that you want to

 

[bunsen burner]

Relax mate. You can invest in anything that you want to

no need to talk out of your arse.

1. People generally do not invest in property because it's tangible
2. Shares are not 9/10 times more likely to get better returns.

At least have some sort of clue before posting

 

[carlyp]

Relax mate. You can invest in anything that you want to

Hmm hmmm...your obviously into shares?

Let me tell you about me.

I was 20 and I have $20,000 saved up so I bought a property.

18 months down the track I purchased another property.

Im now looking at buying a commercial property.

Property has worked VERY well for me.

Im only 22 and Im very proud of myself really. I dont have the time and interest to spend reading share prospectuses and portfolios and what not. I do what comes naturally to me and property and suburbs are exactly that.

 

[Barry Zuckercorn]

no need to talk out of your arse.

1. People generally do not invest in property because it's tangible
2. Shares are not 9/10 times more likely to get better returns.

At least have some sort of clue before posting

I must have no clue if:

1. I do not invest in property; and
2. I am not a BF Jedi.

Answer me one simple question: Overall, what generates better returns? Shares or property?

 

[carlyp]

Answer me one simple question: Overall, what generates better returns? Shares or property?

It depends on the individual shares and the property. If you buy smart on either you should get the same return.

 

[Barry Zuckercorn]

Hmm hmmm...your obviously into shares?

Let me tell you about me.

I was 20 and I have $20,000 saved up so I bought a property.

18 months down the track I purchased another property.

Im now looking at buying a commercial property.

Property has worked VERY well for me.

Im only 22 and Im very proud of myself really. I dont have the time and interest to spend reading share prospectuses and portfolios and what not. I do what comes naturally to me and property and suburbs are exactly that.

I dont deny that people make money from property. But in the same way that you cant be bothered with prospectuses and portfolios (?), others cant be bothered with dealing with real estate agents, renovations, finding tenants etc.

I concede, horses for courses. For me, to date it's easily shares.

 

[Barry Zuckercorn]

It depends on the individual shares and the property. If you buy smart on either you should get the same return.

I beg to differ. With margin instruments such as futures contracts and CFDs etc, a good trader can make returns well over 100% in short periods of time (i.e. matter of weeks-months). I may be wrong, but I couldnt imagine the same with property,

 

[Barry Zuckercorn]

A better strategy than maybe 95% of the population, ie better than not investing at all, better than putting money in the bank, and better than buying osterich farms.

You're doing ok but you need to step up and learn about leverage. Can do with both shares and property but I think property has an advantage here.

The property leverage example is above (use equity in PPOR (primary place of residence) for 20% deposit, borrow 80% balance, and pay in back using rent with the shortfall coming from what you are currently buying shares/super with).

You can also borrow to buy shares. The disadvantage being lenders won't lend 80-100% like they will property, and if you fall under your LVR you get margin called - which means the lender rings you up and asks you to deposit cash with 24hrs to make up for the loss.

Margin lending is just one share strategy. Other good leveraging strategies are options and CFDs. Require a good kitty (say $50k) to get started and is much riskier than property (potential higher returns but potential higher losses).

You need to ask some people about some share strategies. Pay particular detail to their length of experience, success rate, start up float etc. You sound like a pretty limited risk guy so you should be looking at buy and hold strategies via leveraging with either shares or property

You also need to read some books.

And you say I talk out of my arse... Can you please explain why you require a good kitty (around $50K) to trade CFDs when you can get margins as low as 1% for sectors and 3% for stocks?

In case YOU need to read some books, that means I could buy $100,000 worth of a sector CFDs with a $1,000 outlay or $33,333 worth of share CFDs with a $1,000 outlay... So, please, do tell why one would require $50K?

Also: Please explain why CFDs are riskier than property when CFD providers allow you to set Stop/Losses at the price of your choice?

Kind Regards!

 

[bunsen burner]

I must have no clue if:

1. I do not invest in property; and
2. I am not a BF Jedi.

Actually it's because you made two blatantly false statements.

Answer me one simple question: Overall, what generates better returns? Shares or property?

I've already answered it. It's much of a muchness.

And before you come out with your stats that show shares get better returns 9/10, save it because I can go get similar stats that promote property the same way.

Difference between you and me is that you believe the spin.

 

[bunsen burner]

And you say I talk out of my arse... Can you please explain why you require a good kitty (around $50K) to trade CFDs when you can get margins as low as 1% for sectors and 3% for stocks?

You don't need but it's advisable. It's like going to a casino wanting to win $10k with $100. You want a bit more to be able to trade comfortably.

In case YOU need to read some books, that means I could buy $100,000 worth of a sector CFDs with a $1,000 outlay or $33,333 worth of share CFDs with a $1,000 outlay... So, please, do tell why one would require $50K?

I've read the books and been to some seminars on CFDs. Most people say don't bother unless you have $50k or so to invest. It's share trading. You can't just go in with $1000 and expect to start winning.

Also: Please explain why CFDs are riskier than property when CFD providers allow you to set Stop/Losses at the price of your choice?

Kind Regards!

You're starting to be a complete toolwit who's so one sided about shares over property.

I know a lot of people who invested in futures in 2005 using trend strategies. There weren't a lot of trends. Nearly all of them lost money.

Don't know a lot of people who lost lots of money with property - except paper money.

 

[bunsen burner]

I concede, horses for courses.

Good, then shut your mouth because you're being a giant big vagina with your share propaganda. The guy just wants some advice so there's no need to try and convince that shares are so much better.

Just tell the guy how he can use shares netter than he is already doing or why it is better than property without the "shares get better returns" bullsh it propaganda.

oh, and knb'ead: take in mind he's a beginner investor, has a tendency for low risk, and doesn't mind illiquidity.

 

[Barry Zuckercorn]

Actually it's because you made two blatantly false statements.

I've already answered it. It's much of a muchness.

And before you come out with your stats that show shares get better returns 9/10, save it because I can go get similar stats that promote property the same way.

Difference between you and me is that you believe the spin.

It's not spin mate. If you look into it, you can not argue that in general, property provides a greater return than shares in the long-run. Unless ofcourse you actually believe that property doubles every 7 years as many property investors will tell you...

 

[Barry Zuckercorn]

Good, then shut your mouth because you're being a giant big vagina with your share propaganda. The guy just wants some advice so there's no need to try and convince that shares are so much better.

Propoganda? I point you to the second post of this thread:

"property easily for me" -----> (poster: YOU)

PS: Still waiting on a response to my CFD query... - apologies did not notice your response.

 

[bunsen burner]

It's not spin mate. If you look into it, you can not argue that in general, property provides a greater return than shares in the long-run. Unless ofcourse you actually believe that property doubles every 7 years as many property investors will tell you...

it's complete spin. People who prefer property will tell you property gets a better return and will show stats to back it up whilst people who prefer shares will tell you that shares get better returns and will show stats to back it up.

Unfortunately you haven't worked that one out yet.