Shares and property are both popular investment options for growing wealth in Australia. But which option is best for you?
Deciding between investment property or shares is a tough choice. You’ll hear people, experts, even, from both camps claiming that one investment option is better or more reliable than the other.
This brief introduction to investing in shares and property can help you determine the best investment option for you.
Shares: The Pros and Cons
The main draw of investing in shares is convenience. You can buy and sell shares in an instant and generate a steady stream of income without even leaving your home.
Some investing experts are even convinced that the share market is looking better than the Australian property market, when you consider nervousness around Sydney and Melbourne markets, and potential law reforms, at the moment.
While investing in the share market may have a lower barrier to entry, it isn’t a fool-proof one.
The shares market is highly sensitive to global markets and issues, unlike the local property market. International affairs such as the recent China-U.S. trade war will affect international trade patterns and directly impact the Australian market.
This means that the share market can be volatile. Even more so if you invest in riskier stocks, instead of more conservative options that will bring a safer but longer term pay day.
Investing in Property: What You Need to Know
Even with a potential drop in Sydney and Melbourne, the Australian property market has always been seen as a reliable investment option.
Property has long been considered the safer option for investing since it yields more reliable long-term rewards than buying up shares. There are some fluctuations in the market, but that’s typical and no reason to panic when it comes to property.
You’ll have less flexibility when it comes to investing in property. You can’t buy and sell investments as quickly as you can with shares. It can take a lot of time and work to offload an unprofitable property investment while you can simply sell poorly performing shares in an instant.
On the plus side, though, you may enjoy more tax breaks on a property investment. This is a perk that you don’t get with shares.
Choosing Between Shares and Property Investment
Property remains a long-term and stable investment option in Australia. Bricks-and-mortar buildings have physical value that volatile stocks just can’t compare to.
What’s more, by investing in property, you have more control over the value of your investment. You can choose to make changes to a property that will increase its value.
Depending on your situation, it may not be a choice. You can have a mix of both property and shares. Diversity in your investment portfolio is important – if the property market goes bad, you will be supported by your shares, while if the stocks take a hit you’ll be protected by your investments in property.
Ultimately you’ll need to carefully weigh all the pros and cons of both shares and property as they pertain to your unique situation.
Get advice today
Your budget, lifestyle, financial goals and circumstances will all impact your investing decisions. So while opinions are helpful, you’ll need your own specific investment advice.
Contact Nitschke Nancarrow, experts in all aspects of accounting, financial planning, property investment and business. We operate in Adelaide, Sydney, Melbourne and throughout Australia. Managing partner Kym Nitschke is available for a free initial discussion about your situation. Call us on (08) 8379 9950 or send me an email.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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