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I tend to side with craft's view in that unless you're buying property as a home then its not as appealing as the wider public would have you think. People like to spruik about their successes with investment properties but often once you look at the underlying position after all costs it can be very underwhelming.A brief example - my parents are recently retired and have available capital and were thinking of purchasing a house or unit in their nearby capital city as they live in the country. For the purpose of the example i'll just say they were looking at spending $500,000 and thought it would be a good idea as they can use it whenever they like, can have friends over when they are in the city, or friends could occasionally use it for a small fee. However I said hang on if you purchase a unit or house, you have to pay rates and/or strata fees, furnish it, insurance & bills plus other maintenance costs and you'll feel like you have to go to that city for every holiday so you feel like you're getting use out of it.Compare that to investing the $500,000 elsewhere and assuming what i'd say is a relatively conservative 5% return per annum you then have $25k on average to use each year to travel anywhere you wish without the additional expenses hanging over your head and the flexibility of having that capital available if needed whenever you wish.That's a pretty basic example but I've got a pretty firm belief that unless you're lucky enough to pick properties that end up going through substantial growth then all the incidental and underlying costs really make it not worth the hassle particularly with the lack of flexibility and agent fees etc. Property allocations in a portfolio are much easier to come by in other manners plus it means you can get access to not only residential but commercial property as well which is almost impossible on an individual basis.Property to me is a bit of a status thing for people to say around a bbq, "oh yeh i've got a couple investment properties now" and sound superior. People understand that more then another guy at the same bbq saying "I've got a pretty solid portfolio of ETF's established now".
I tend to side with craft's view in that unless you're buying property as a home then its not as appealing as the wider public would have you think. People like to spruik about their successes with investment properties but often once you look at the underlying position after all costs it can be very underwhelming.
A brief example - my parents are recently retired and have available capital and were thinking of purchasing a house or unit in their nearby capital city as they live in the country. For the purpose of the example i'll just say they were looking at spending $500,000 and thought it would be a good idea as they can use it whenever they like, can have friends over when they are in the city, or friends could occasionally use it for a small fee. However I said hang on if you purchase a unit or house, you have to pay rates and/or strata fees, furnish it, insurance & bills plus other maintenance costs and you'll feel like you have to go to that city for every holiday so you feel like you're getting use out of it.
Compare that to investing the $500,000 elsewhere and assuming what i'd say is a relatively conservative 5% return per annum you then have $25k on average to use each year to travel anywhere you wish without the additional expenses hanging over your head and the flexibility of having that capital available if needed whenever you wish.
That's a pretty basic example but I've got a pretty firm belief that unless you're lucky enough to pick properties that end up going through substantial growth then all the incidental and underlying costs really make it not worth the hassle particularly with the lack of flexibility and agent fees etc. Property allocations in a portfolio are much easier to come by in other manners plus it means you can get access to not only residential but commercial property as well which is almost impossible on an individual basis.
Property to me is a bit of a status thing for people to say around a bbq, "oh yeh i've got a couple investment properties now" and sound superior. People understand that more then another guy at the same bbq saying "I've got a pretty solid portfolio of ETF's established now".
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