It’s the age-old debate: stocks versus property? Anecdotally, Australians see certain security in investing in bricks and mortar, despite having one of the most active stock investment audiences globally. So, if you’re thinking about investing but not sure about where to get started, read below for the benefits of both property and stock to see which investment type is right for you.
Property Investment Benefits
- Real versus perceived value: In property investment, it is possible to buy a property for less than what it is truly worth, or sell a property for more than it is worth. Whereas in the world of stocks, investors are well informed, information is easily accessible and you buy stocks at the same price as everybody else.
- Added value: With property, you can control your own destiny and add value to your investment through considered renovations or other improvements. However, with stocks, you place your trust in the company and their ability to deliver strong results.
- High demand: There is an intrinsic value in the property as there will always be a demand for it. People will always need to put a roof over their heads. There is lower risk and higher stability in investing in a high demand product.
- Leveraging your assets: The ability to grow your portfolio based on the equity of your existing assets is unique to property investment.
- Stable marketplace: Property investment doesn’t rely on investors to sustain itself, ensuring your investment is unlikely to collapse and lose its value.
- Tax benefits: An investment property opens the door to tax deductions for ownership costs of a rental property, tax benefits of negative gearing, and capital gains discounts.
Stock Investment Benefits
- Fluid cash flow: Unlike property investment, where rent is your only stable income, and capital gains can only be experienced when you sell the property, stocks allow you to access your investment easily and inexpensively.
- Stay in the green: Investing in stocks has a low barrier to entry, permitting people to invest in stocks from as little as savings from two month’s pay. However, property investment requires a large initial lump sum which often requires you to go into debt to sustain, causing financial strain.
- Simple processes: Investing in stocks is straightforward. All you need to get started is an online account to trade and there are plenty of tools out there which will help you set up and manage your portfolio. Buying a property, naturally has more steps to the process. However, if you are interested in investing in H&L Packages, then the experts at iBuildNew can do a lot of the legwork for you.
- Diversification: It is easy to have a stock portfolio that covers a wide variety of industries, from mining to telecommunications. However, with property investment, while you can invest in varying types of property including commercial and residential, the cost to do so is significantly higher and in most cases prohibitive. Diversifying your stock portfolio also means you aren’t relying on one sector drive your returns, increasing your chances of driving high-value stocks.
The one fact that rings true for both property and stock investment are that not all stocks and not all property are guaranteed to be a positive/strong performing investment. Both require significant research and a considered approach. And there’s no reason to say you should choose only one, you may start off in stock investment as a lower barrier to entry, working your way up to property investment.
After reading this article, do you still think that property investment is the better option for you?
Need help getting started? iBuyNew will point you in the right direction! Whether you are looking for apartments, townhouses or house and land packages, working closely with an iBuyNew property consultant, who understands the market, will help you find something suitable that’s tailored to your needs and requirements. Get in touch with them on 1300 123 463.
Zoe Langenberg
Zoe is passionate about coffee and interior design. You can find her most weekends exploring an art gallery or devouring a good book.
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