Home News Shares or property: Which is the better investment?

Shares or property: Which is the better investment?

Font size :
For most Australian investors, property investment is the way to go. Many of them are taking advantage of negative gearing, where they can claim a deduction against their ordinary income for property investment expenses not covered by the rent. These include a plethora of fees such as strata/body corporate fees, management fees, repairs, interest on the bank loan, council rates, insurance, and land tax.

But while these deductions are certainly helpful, investors need to see decent capital gains in order to profit from it. The losses every year can mount up over time, and they can end up being at a loss even if they sell their property at a higher price than they bought it for.

On the other hand, investors choosing to invest in shares can take out a margin loan, but it also has its own set of disadvantages. These include higher interest rates, lower lending levels, a potential for margin calls, and required knowledge and experience to invest in the right shares. If investors choose not to use a margin loan, they need to have a sizeable lump in the first place.

However, property investors should consider diversifying beyond property. Investing in shares gives investors the potential to beat and drive much higher returns in the market. According to recent ASX long-term investing report, investments in Australian shares made through super had a 9.9 per cent return after tax compared to just 9 per cent for residential property.

Yet those who still want to invest in residential property can try rentvesting, wherein first home buyers make their first home purchase an investment and either rent elsewhere or live at home with their parents.

This shows that through investing across both asset classes, investors can get the best of both worlds.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

Why choosing the right mortgage is hard for first-home buyers Why choosing the right mortgage is hard for first-home buyers

Many feel overwhelmed by the sheer range of products and interest rates on offer, a new survey reveals Read more

Mortgage applications drop in second quarter Mortgage applications drop in second quarter This marks the “beginning” of a downward trend, says Equifax executive ... Read more

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates ... Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

More mortgage news and articles

Sponsored Links

Monday, Jul 24, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords