Listed Property vs Personal Property Portfolio

[#1]

Hi. I know this debate has been covered over and over on this forum. But I still donÂ’t completely understand all the benefits over listed property vs. your own property portfolio. I know the risk is much less with listed property, but aren't the returns much less as well? Say you buy a good property with a relatively small shortfall after rental income that breaks even after a couple of years and then starts generating positive cash flow. Will this not generate superior returns in the long run?

[#2]

IMO, unless you're a lucky speculator, the price of privately owned property in the long term just keeps up with inflation and building costs. Subract transfer fees, bond costs, maint costs and interest on your bond and unless you're living on the property yourself (you gotta live someplace and that has a value to be considered) I think you're better off investing in listed property as you gain the share price increase as well as the divs.

[#3]

TraderRoss, historically private property was a very good investment due to the gearing effect coupled with a market in which property prices were climbing nicely. Currently, market is flat to declining slightly so you no longer have the same gearing effect you had previously i.e. where you could subsidise the bond with the intention of generating superior returns from capital growth. If you subsidise now, you will get very little capital appreciation if any. In the current market, I would only target homes in good established areas where there is decent rental demand and facilities and only homes being sold by financially stressed sellers where I could pick up the home/s at a discount to current market price. That being said, I still think there's better and easier money to be made in Equities.