Property vs. shares is an argument that has been around for a while. Both investment vehicles have their success stories but which of these is a relatively safe bet for the ordinary person. Here are 8 reasons why property is more likely to yield returns for you.
It’s easier to find Undervalued Property than Undervalued Stocks
When property or stock is priced way below what it’s actually worth, it’s easy to buy cheap and make a healthy profit in the future. The stock market is very fluid and investors are kept well informed at any given time. Usually, if you’ve heard something, it’s quite likely that other people also have. Information doesn’t travel so fluidly in the property market and this makes it easier to get a property that is undervalued.
You can add value to property
In the case of shares, all you can do is hope that those working in the company make the right decisions. However, in the case of property, you can do some renovations and instantly raise the rate of capital growth.
Property doesn’t go out of style
Many large companies have come and gone and the world didn’t end. However, the property market deals in a basic human need, housing. Housing will always be in demand. Even when a house gets old, it doesn’t necessarily get demolished, it could simply become a period home.
People in the UK love Property
Homeownership has always been a big deal in the UK. The recent decline in home ownership numbers has more to do with price than popularity. Property is popular because it’s a commodity that people understand and can easily become experts in. Shares, on the other hand, are a new concept to many people.
You can leverage a very high percentage of the value of your current property to invest in even more property. No other investment vehicle allows you to leverage as much as you can with property. Even if the value of your property falls, it doesn’t have the same effect as when your margin calls fall through in the case of stocks.
The Property Market is tried-and-tested
It’s easy to track how the value of property has appreciated over several decades. This is because the market is more stable so it’s always easier to get a picture of how the property will perform.
The property market is not as volatile
The value of shares can drop to zero just because of a single bad headline. The property market, on the other hand, has fewer investors. Even if all the investors abandon the market, there will still be people in the market.
Property loses less in form of taxes
There are many tax deductions that you qualify for when you start investing in property. Many rich people, both locally and abroad, have made a lot of money by investing in property. Even people who didn’t earn their wealth in property will invest in it at some point.