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  • Property vs Shares

    I've recently just purchased my second property (purchased as in taken out a bigger mortgage ), which will be my investment. It seemed like a good idea at the time - long time tenants, good location, reasonable cost - but after much mulling over, I think it may have been better to go for shares, as an investment.

    not after advice or anything (deal is done, and I'm happy enough), just curious as to owns property (in whatever sense), and those who own shares, and your various reasonings.

    I really do think the main reason we (my fiancee and myself) got another property was the constant bombardment of renovation, DIY, auction shows that are on TV atm. It just seems that property *is* security, whereas shares are a gamble.

    or is this just us getting sucked in by mass media saturation?
    Now listening too;
    - Russell Robertson, ruining whatever credibility my football team once had.

  • #2
    If i had the cash or income to support a mortgage i'd go for property.

    You can touch and see it and manage it yourself, being free to do what you want to do. While shares are something you buy and forget with the added risk that some corporate crim, inept management or collapsed market can take it all away from you. With property its yours, no one is likely to steal it.
    Not lip service, nor obsequious homage to superiors, nor servile observance of forms and customs...the Australian army is proof that individualism is the best and not the worst foundation upon which to build up collective discipline - General Monash

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    • #3
      Property, all the way! I don't know how the rental real estate and tenancy laws are down in the land of Oz, but here in the States, though it can be damned hard, and a royal PITA owning single family residences as rental properties, they are still a better investment than time shares (I assume that is what you're referring to when you say "shares").

      My wife and I "own" (as in still paying the mortgages) the house that we live in, as well as another house about 200 miles away. We originally bought the other house right after getting married, to relocate closer to her parents, but as it was in the hills, and she is a poor automobile passenger (gets car sick, fairly easily) we changed plans and decided to keep it as a second home, and rent it out. The decision was made a bit easier to keep and rent, since the local property values had tanked at about that time, due to a number of circumstances. Since then, it has been costly in terms of repairs, but the overall and long term benefits of having the tax benefits now, the accumulating equity, and secondary income stream after we retire makes up for the headaches.

      Besides...it she ever dumps me for paying too much attention to the computer and not enough to her, I'll have a place to run to. Might have to share it with the snakes and tarantulas, but hey - a man will make his bed where he can...
      I have no problem at all with being proved wrong. Especially when being proved wrong leaves the world a better place, than being proved right...

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      • #4
        Originally posted by JAMiAM
        they are still a better investment than time shares (I assume that is what you're referring to when you say "shares").
        I don't think that's what Ivan was referring to. Outside of the U.S., Shares generally describe what Americans would describe as Stocks or Equities.
        -
        Currently playing:
        SP5 The Hornet of Cloville vs Larry Maxwell, RB5 The Last Bid vs Michael Peaberry

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        • #5
          yeah, what Reep said

          stocks vs property for the Yanks.
          Now listening too;
          - Russell Robertson, ruining whatever credibility my football team once had.

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          • #6
            Land is a great investment, God isn't making anymore of it...
            "Have you forgotten the face of your father?"

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            • #7
              Originally posted by Tim McBride
              Land is a great investment, God isn't making anymore of it...
              Good point.

              My uncle went with property. He took up carpentry as a hobby, improved on his property increased its value considerably. I'll likely try to emulate his success by investing in property. I'm too much of a worry freak to play the stock market.

              In any case, wish you and your fiance great wealth Ivan. Hopefully, you'll amass enough wealth to retire by 50.
              "As soon as men decide that all means are permitted to fight an evil, then their good becomes indistinguishable from the evil that they set out to destroy."-Christopher Dawson - The Judgement of Nations, 1942

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              • #8
                I'd agree with the rest, property is the way to go it is real and tangable.

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                • #9
                  well, the plan atm is 5-6 properties by the time I'm 30. Basically a case of using the existing properties as equity for a new one once the loan-to-value ratio is low enough. And hoping our bank sticks with the fixed interest rate for the duration...

                  to be honest though - if I was going to do it again, there'd be no way in hell I'd be buying property at my age - too much stress, too much effort, and just a lot of mucking about. Also, watching your mortgage decrease by hundrenths of a percentile is a very sickening feeling when you look at how much cash you;re pumping into it...

                  30 is the age you should look at property. Not gawddamned 22.
                  Now listening too;
                  - Russell Robertson, ruining whatever credibility my football team once had.

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                  • #10
                    Originally posted by Ivan Rapkinov
                    well, the plan atm is 5-6 properties by the time I'm 30. Basically a case of using the existing properties as equity for a new one once the loan-to-value ratio is low enough. And hoping our bank sticks with the fixed interest rate for the duration...

                    to be honest though - if I was going to do it again, there'd be no way in hell I'd be buying property at my age - too much stress, too much effort, and just a lot of mucking about. Also, watching your mortgage decrease by hundrenths of a percentile is a very sickening feeling when you look at how much cash you;re pumping into it...

                    30 is the age you should look at property. Not gawddamned 22.
                    So where is this bit of realestate ya junior capitalist?
                    Not lip service, nor obsequious homage to superiors, nor servile observance of forms and customs...the Australian army is proof that individualism is the best and not the worst foundation upon which to build up collective discipline - General Monash

                    Comment


                    • #11
                      Real estate is certainly a solid investment. It tends to fluctuate a lot less than corporate shares, and you do have something tangible to show for it in the end. And even though there are slow downs, most properties will go up in value with time.

                      However, there is something to be said about solid corporate shares. First, they're a lot less work. The analysis and research phase is a bit more complicated and tedious, but once a good stock is bought, you just let the money roll in, and let the corporate execs deal with the problems.

                      There are also other types of investments, like bonds (corporate and government), currency trading, mutual funds, etc.

                      Why not invest in both? Any investment expert will certainly recommend a balanced approach to investing.

                      Nat

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                      • #12
                        Yes I would definitely spread out investments. The property market currently has all the hallmarks of a rational bubble.

                        People have been burned by the .com bubble bursting and have over reacted (as people do) by putting everything in housing instead - creating a similar bubble situation.

                        So many people have investment properties now I just wonder what's going to happen to the market when interest rates rise. As soon as a significant number of people start cashing in on their properties and moving the money to investments where a high interest rate is beneficial, I can see panic starting.

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                        • #13
                          Well, IMHO the problem with real estate is that it's worth is one of the most virtual values on earth...

                          I mean all in all the values of real estate are estimated by a combination of need of land, kind of land and the "neighborhood".
                          Wich are, exept for the first thing, values of personal opinion, and, as larger companies tend to outsource into areas with loads of land, this point looses it's importance.

                          Apart from that, real estate value has a relatively fragile appearance. Banks lend money for purchasing real estate often by taking the estate itself as security, thus creating shaky foundations.

                          In the end real estate values tend to drop over time and so you might I the end not earn money but in fact just get what you payed...
                          "A platoon of Chinese tanks viciously attacked a Soviet harvester,
                          which was peacefully working a field near the Soviet-Chinese border.
                          The harvester returned fire and upon destroying the enemy
                          returned to its home base."

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                          • #14
                            Real estate is cyclical, but it tends to increase in value over time, especially in large cities. As many have pointed out, land isn't being made. With population increasing, more and more people will want their own little piece of land. With demand going up and supply remaining the same, value necessarily has to go up.

                            I think we're close to the top of that cycle. The dot.com burst of 2000 had two effect, both which made real estate quite attractive. First, interest rates went down to stimulate the economy. That made house purchasing very affordable. Next, people were looking for a better investment than the stock market. With house prices going up because everyone was buying houses due to low interest rates, many saw an opportunity there.

                            At this point in time, housing prices have gone up so much that they're not as attractive as they once were. And with interest rates rising, it's becoming less and less affordable.

                            I still think real estate is a good investment, especially if you're buying your first house (after all, everyone needs a place to stay). But if you're looking at the value increase of the past few years and thinking that you'll be getting the same kinds of returns, you may be thinking wrong.

                            Nat

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                            • #15
                              Tem: our apartment is on the river in East Perth (just off the Graham Farmer freeway), and the investment property is in Vic Park. Close enough to the university to ensure a steady supply of tenants
                              Now listening too;
                              - Russell Robertson, ruining whatever credibility my football team once had.

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