How was the property market for you in 2011?
Personally, I think it has been a contrasting year, tough in places, but still providing plenty of bright spots for the smart investor.
What will happen in 2012? I wish I knew. But what I can share is more than 20 years of property market experience.
So, here are 7 reasons Why I STILL like property!
Reason # 1 - Add-Value
You can buy a rundown old property and increase the value of your investment by getting your hands dirty, or paying someone to get dirty! Hard to add-value to the Commonwealth Bank shares I own. Sure I bank with them… but I don’t really think my day-to-day savings account is really going to add much value to my stock portfolio!
Reason # 2 – Limited Supply
I like that property takes a while to plan and build because, in my opinion, the demand and supply equation has lots to do with the price of property.
With shares, however, the company can make a capital raising at any time or issue options to directors or employees. This type of activity can dilute your shareholding making your piece of the pie smaller.
Reason # 3 - Capital Gains Exemption
Unlike any shares I currently own, the home I live in does not attract capital gains tax. This has been lucrative for many Australians and I can't see the law changing in this regard for a long time. This same situation has been lucrative for many Australians and I can’t see the law changing in this regard for a long time.
Reason # 4 - KISS (Keep it Simple Stupid)
I like property because it's easier for me to understand compared to shares.
Granted I work in property, but, I know if I buy a property for $500k, I can get $600 a week rent and comfortably work out other expenses. But, have you ever read a share prospectus or company annual report and completely understood it?
Reason # 5 - Master of my Domain
I like property because I can be master of my own domain. I can be the CEO of my investment property, the CFO of my investment and answerable to the board directors that I care about, my wife.I don’t know about you, but I’m pretty sick and tired of golden handshakes to CEO’s and self-interested company directors that pretend they have shareholder company value at heart, really?
Reason # 6 – Don’t remind me
I like property because I’m not reminded of how much I have lost or made every day.
I really don’t want to wake up and wonder what the Nasdaq did overnight and worry how that’s going to affect my share portfolio here.
It’s easy to spend a lot of wasted energy clicking “refresh” on Comsec wondering if your stocks have gone up or down…
Reason # 7 – Margin Calls Stink!
I like property because even if my property has gone down in value, which it hasn’t, it's very unlikely a bank will give you a “margin call” and force you to sell.
The problem with margin calls, from my experience, is it forces you to either come up with cash…or sell stocks at a time when you don’t want to.
GIVE ME PROPERTY ANYDAY!
Tyron Hyde is a director of quantity surveying firm Washington Brown. He has a degree in construction economics and is an associate of the Australian Institute of Quantity Surveyors.
The above information is supplied by Washington Brown.
Disclaimer: while due care is taken, the viewpoints expressed by sponsors do not necessarily reflect the opinions of Your Investment Property
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