Property versus shares

The main advantages of shares (compared to property) include:

  • You can outsource the management of a share portfolio to an advisor. However, as a property investor, you may need to spend time working with your managing agent to deal with tenant issues and/or property maintenance/repairs.
  • Shares can generate a stable level of income with no (or few) related expenses. For example, the ASX200 index has yielded circa 4.5% p.a. for a long time.
  • Shares are liquid and have low entry and exit costs e.g., no stamp duty, real estate agent fees, etc. This means you can invest and divest in small increments.

The main advantages of property include:

  • Most investors feel comfortable borrowing to invest in property, which means you don’t need to make a large upfront cash contribution to be able to invest.
  • The assets' tangibility can make investors feel more comfortable.
  • You don’t need ongoing financial advice after you have purchased the property.
  • The investment-grade property provides most of its return in capital growth in return for less income, which is tax effective.

We can debate the pros and cons of shares and property until we are blue in the face, but I think it’s a meaningless debate.

It’s like debating which golf club is better.

They are all different and you need more than one club to play well.

RealRenta has all the tools that a property manager has but for less than ¼ the cost of a property manager.

You can now manage your Residential, Commercial or share/student accommodation property

Join now and the cost is less than a cup of coffee a week to manage your rental property.

RealRenta also has a free vision, so why not check it out.


Jason Gwerder
Thursday, 29 February 2024

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