Ask the right questions, ask the best people and decide if investing in property is a good idea for you, now or later.
Maybe you’ve got some money to invest, you’ve checked out some differences between investing in property and shares in Part 1, but you’re still not sure which one suits you.
Here are 3 tips for you, pretty obvious, but often overlooked:
- ask the right questions
- ask the right people
- decide what’s best for your circumstances
1. Questions to ask for deciding whether to invest in property
Which of these pros and cons are important or attractive to you? And do the pros of property investing outweigh the cons?
- financial leverage
- capital growth
- rental income
- tax benefits
- inflation hedge
- lower volatility
- it’s tangible
- you can directly control and add value directly to it (eg by renovating, subdividing, change it’s use)
- pressures on borrowing, affordability and capital growth- in current financial times (see Michael McNamara below)
- property bubbles (see Michael McNamara below)
- active management
- vacancy and tenancy risks
Investing in Shares, some ‘cons’:
- lack of personal control
Explore BiG’s areas Wealth Creation, Property and Investing in You for help.
These articles too will help you clarrify and answer which is best for you, if any and what combination, at this time in your life or later.
Property Planner, Buyer and Professor Podcast Listener questions answered #1 – What would you do differently if you could go back in time 25 years, tips for first time buyers, and more… (Ep.52)
Michael Yardney: Ten Reasons You Shouldn’t Invest in Residential Property
Millennials struggle to invest, but property top priority Ross Fox, First Links Morningstar
Sydney University: Understanding investing for long term gain
James Leitz: The Stock Market vs Real Estate Investing
Nigel Ward: Property vs shares the real story!
Caroline Munro: Listed versus unlisted property
Australian Property Investor (API): Investing in property or shares
Anthony Keane: Why real estate investors should consider multiplying their assets
Property investment is a popular pastime for more than two million Australians, but if you want it to grow you riches you need to treat it as a business instead.
Margaret Lomas 20 Must Ask Questions with Margaret Lomas Podcast on PropertyTalk
JT Reed (USA) How to get started in real estate investment
Travis Morien: Why invest in real estate?
Property Man: Why property investment is better than shares!!
2. Who can help you decide whether to invest in property?
There are hundreds of property investing advisers that are rated in BiG’s Property Gurus and any pros and cons also listed. They follow a lot of different strategies, you can find more about those in Property Strategies and Topics.
A common problem is finding investment advice that is objective and suits you. Do you or anyone you’re getting your investing ideas from have particular investment biases?
Financial planners are restricted in the advice they can give on direct property investment. So if you learn as much as you can about both investment types, and keep in mind the source and inherent biases behind the information – you’ll be in a stronger position to make smarter investing decisions.
Financial planning and property investing advice:
The BiG Directory has many links to help you find “Financial Planners, advisers & accountants | How to find and choose good ones” [Open the accordian], these are just some:
Canstar What is a Financial Planner & what to expect 7 Step Checklist
Caroline Munro: Property house of cards threatens planners
3. Decide what’s best for your circumstances
What you’ll invest in is up to you.
As you work through the issues in 1. and 2. it’s up to you to whether or not you use professional investing help from experts or .
If you’re still can’t decide, maybe it’s time to get your BiG Life Planner, or if you already have it, revisit it and work on your priorities.