Individuals have a very difficult decision to make when they are planning to invest their hard earned money. To invest in stocks or to make a property investment is the billion-dollar question before them. To the layman both decisions appear lucrative and both may have equally high financial risks. Even financial experts will be of differing opinions and divided as to the most beneficial avenue for investment. Both these investment decisions are not without their individual advantages and disadvantages, but certain factors make one of them more beneficial than the other. In Australia, at present, property investment is the right vehicle for investing when compared to stocks and shares. The economy of Australia is robust and the people also have great confidence in the economy as well as in their government, which makes it an ideal place to venture boldly in making property investment.
However, when you purchase some shares in a company you are just opting for ownership of that company without having any authority to oversee or interfere with its running. The directors and other managerial staff are the actual persons who run the company and hence their actions and decisions may be detrimental to your investment. You do not have a say in the matter and the best you can do in any adverse situation is to sell your share. However, if the company is in the red then the proceeds from the sale of your shares might even be less than the purchase cost. Hence, as compared to property investment, investing in shares and stocks is an unpredictable affair.
When comparing the returns you may get from each of these investments, property investment is the strong winner. Investing in shares may get you dividends, which are offered as a percentage of the profits made by a company. However, the company has to make a profit for dividends to be declared and also the declaration and payment of dividends to shareholders is entirely at the whim and fancy of the Board of Directors who may see it prudent to retain the surplus with the company as reserve capital. In such a case there is no distribution of dividend and your shares do not get any ongoing income.
Property investment creates a substantial continuous flow of income in the form of rentals. When you have undertaken a property investment in a prestigious and popular location, your property is sure to attract tenants who will be willing to pay high rental for the use of your property. The rentals from such tenants will not only take care of the maintenance of the property, but will also pay for the property investment in the long run. Hence, property investment provides an excellent vehicle for sustained income allowing a continuous cash flow, which in the long run takes care of the investment. Another emotional factor concerning property investment is that it is the ultimate dream of a common man to have a home of his own. To own a home the individual will make ultimate sacrifices, because it guarantees a roof over the heads of his beloved family. This feeling of well being and satisfaction is also a major motivation for property investment over investing in stocks and shares.
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