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Property investment the safest asset - Why

Why property beats all other investment

Why property beats all other investment

For many investors, the real estate market is so much easier to understand, forget about stocks’ ratios such as PE and Quick Ratio or the technical analysis etc.

The property has to do with real values, let’s face it, people can see that there is a property bubble or there is a shortage of housing supply in a specific neighborhood.  Speculation is rather difficult to implement in the property market.  Properties are tangible assets, and that makes people feel more comfortable to invest, in compared with stocks and bonds and all the other financial instruments.

Talking with some of our clients, it was interesting to see similar reasons why they love investing in properties:

1.      Properties are Tangible Assets

‘’My Funds are safer when they are invested in properties…’’  Obviously, there is less risk which makes the return lower too, although nowadays there are locations and properties which outperform way above the interest rates and generate good fixed income return and appreciation in value.    

Also, well-located properties which are highly demanded can overcome the liquidity problem which properties have by nature. 

2.      Less Speculation

Properties are not fluctuating in price every week just because a mega tycoon has bought a particular stock in millions…  so it gives me, as a property investor, more control over my little investment.

3.      Investment for the Family

Perhaps that was one of the strongest arguments, for most of the people, proudly they can leave to their children a valuable asset which it’s there, easy to be seen and used from the future generations .. Undoubtedly stocks can’t beat that.

4.      There is a good rental income

Well, there are holiday properties and residential ones, also offices and shops, some of those properties beat the stock dividends or government bonds.  We do have rental yields of 5% to 7%, and that can pay off the mortgage of the property.

5.      Over the long run property prices rise

Capital appreciation is certainly a huge plus for the property investment, once again, it all comes down to the location of the property.  Choose the right location, pay the premium, and you’ll make the maximum of your investment.

 


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