Wealth Creation | Property Investing | Share Investing

How to Choose Investment Vehicles (Part 1): Shares v Property?

Updated September 2020

100_0231
What investing vehicle do you like?

Should you invest in shares, property or both?
Have you got investing favourites or biases?
You can work out what’s best for you by asking these basics that financial planners and advisers ask.

What’s your:

  • financial position?
  • investing time frame?
  • personal preference?
  • risk profile?
  • goal/s?

Get help answering these questions with the planning and self assessment tools available from the government organisations, Analysts and Commentators and other experts in Wealth Creation and Wealth Gurus BiG has found. Often their guides are free, they just want your email.
At the end of this post are some sample planning tips and tools.

Should you buy shares or property?

Your circumstances and answers to these questions will help you decide what you’re interested in and what’s best for you to invest in.
Here are some arguments for and against buying property or shares that experts and others point out.

Shares

Some ‘pros’:

  • liquidity 
  • low entry and exit costs
  • little active management
  • you can buy into the property markets through vehicles such as real estate investment trusts (REITs/(Australian) AREITs) and Exchange Traded Funds (ETFs)

Some ‘cons’:

  • volatility and risk
  • lack of personal control and ability to add value
  • too much or too little knowledge and understanding about the company, its business, its board and management
Property

Some ‘pros’:

  • familiarity, you can see, feel and understand residential property especially
  • DIY add value (subdivide, renovate etc)
  • DIY management
  • lot of real estate experts, information, courses and other resources (eg Property Buyers agents)

Some ‘cons’:

  • the advice financial planners can give on direct property investing is restricted. It’s often then left up to you
  • not liquid – buying and selling take time, not instant and costs are high (stamp duty, conveyancing, advertising, agent fees)
  • pressures on borrowing, affordability and capital growth
  • property bubbles
  • needs active management
  • vacancy and tenancy risks

Here are some links to financial planning sites and self assessments tools to guide you:


I hope you’ve got a better idea now of the good and bad in both share and property investing.
If you can keep these in mind and be aware of any inherent biases behind the information and advice, you’re more likely to be more successful as you invest.

You can dig deeper into your choices in share and property investing, and what suits you better in the next post,
How to Choose Investing Vehicles Part 2 ‘3 Tips for choosing investing vehicles’.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Share This