Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Property Investment

Reply
Funnymoney
Frequent Contributor
As I stated earlier.. You will receive a number of opinions. There are advantages and disadvantages buying property or stocks. I have both, but I will continue with property. Go with whatever makes you feel comfortable. You can crunch numbers forever, but there will always be risk factors either way.
0 Kudos
Som2
Contributor
Funnymoney which investment has given you better returns between property and stocks? Were you buying property in your personal capacity or company or trust?
0 Kudos
Not applicable
Would banks finance a property that is intended to be acquired using a trust? Or trusts are only setup when one has lots of lotto monies and not leveraged?
0 Kudos
BC02
Super Contributor
Theres a lot of good advice on this thread but what I do agree with, with Funnymoney, is that you will make more money with what you feel comfortable with. The one Market Wizard in the US made over $80mil in shares in a couple of years but lost most of it in property investments, purely because trading was his skill, not property.

Ive seen people make and lose money in property, shares, art...etc
Go with the asset class you understand the best, but be open to learning about all the asset classes before you choose your direction.
0 Kudos
Rams
Super Contributor
Db88 is a young man with a stable income....So can he take on the risks ....what you need is good analytical and research skills...you have to use leverage effectively ...but first you can't go out and buy any property...have a set criteria and buy accordingly....you need access to lots of funds because you may not be able to get it right with the one but 3 out of 5 will be enuf to be profitable....I would say you wasting your time with anything less than 5....
0 Kudos
Funnymoney
Frequent Contributor
Ok so which have I done better with.. Well for a start, I'm a really practical person and enjoy working with my hands. So I choose property as I enjoy the fact that I could possibly purchase a run down place on auction fix it up and flip it. Have I done that yet? The answer is no. 4 years back I bought my first property. A small 1 bedroom unit, which I rent out. With the interest rates having dropped substantially, I'm just about covering costs. not long after this I started out buying Satrix and then went on to buying shares. Do I know a lot about shares.. Not really. What I do is buy shares that I think will continue to grow and are good competitors.. such as Woolies, Mr Price and chance guys like supergroup and Pinnacle. I also have a few funds such as Coronation top 20 and others as well as an RA.. Over time with a good credit rating, I have managed to acquire other properties. I have a 50/50 share in two of the properties and own 3 of my own, thus owner of 5. These have all been purchased in my personal capacity. I aim to pay them off and generate that passive income. Why have I told you all of this? Well, to give you some insight into how I've gone about things. I'm no guru but we learn as we go..Hopefully along the way we don't incur too many losses. I like property because one gets the capital growth as well as rental income. Also, provided you have a good credit rating, you purchasing that property with the bank's money!! Shares, you generally buying cash. With property, one can purchase as part of a growing portfolio, or buy to flip.. I will never shoot down any of the other investment opportunities as there will always be someone who made their fortune in it. What I will say to answer the question as to which has been better for me..is that in truth I havent compared them closely enough, but the real question should be what is your long term goal or strategy. Mine is to accumulate a number of properties and have them paid off and live off the passive income.. You need to decide what yours is.
0 Kudos
Intaba
New Contributor
Hi Db88. I've recently acquired 2 properties as part of a long term financial plan. I'm still very new to it all and learning all the time. I enjoyed reading all the comments on this thread. I have a simple spreadsheet I'd be happy to send you which helps me in working out if buying a certain property is a good investment or not. I'm no financial expert or excel professional but happy to offer some humble help as I have always appreciated the helpful advice on the forum. Email me on [email protected] if interested. Cheers and all the best.
0 Kudos
Som2
Contributor
Thanx for sharing.
0 Kudos
SimonPB
Valued Contributor
the key point is as you say, you can borrow money to buy property, leverage .. with shares one can, but not nearly to the same degree ..
0 Kudos
Not applicable
Anyone with the experience of buying land in light of developing it?
0 Kudos
Funnymoney
Frequent Contributor
Hi smallmaster... That is the route I'm planning to go.. But still have a lot of investigating to do! We learn as we go though. To make money in property in the current market, one really needs acquire a property below market value.. That is GENERALLY the best bet.
0 Kudos
db88
Contributor
Thanks again for all the responses. The fact that so many of you are not fans of property as an investment has really made me think twice. I still believe that direct property as an investment holds value, especially if you can find the right property. Skaaptjop I also find it very interesting that you use your bond to buy listed property. I will definitely do some analysis to see what returns could be generated from the two different strategies.
0 Kudos
partridge
Super Contributor
AND THE PRIZEWINNING CONTRIBUTIONS ARE: 1.BC02 - first comment and first two paras of second comment 2.Skaaptjop - comment on diversification in listed property You will both be entered in the draw for the grand prize at year end
0 Kudos
Jughead
Contributor
One of the main reasons you think you have a good investment in property is that you gear yourself into the investment on the expectation that the price will go higher. Onece you've paid off the bond it doesn't look so good any more. On the other side if the price goes lower you dont feel it so much unless you need to sell. If you do you're in trouble because real estate is slow and expensive to trade.
0 Kudos
Not applicable
Buying property, is to fix the price for the next 20 years
0 Kudos
SimonPB
Valued Contributor
nope, coz you got maintenance .. buying a share is to fix the price ..
0 Kudos
prancing_horse
Super Contributor
My property portfolio comprises residential, commercial, industrial and agricultural properties,and of all these I can honestly say residential is by far the worst. Agricultural land has the land claims question hanging over it,as my small beef farm currently has, so that leaves commercial and industrial as your best property investments. Why do you think all listed property stocks are made up of the last mentioned? Being in construction (a feast or famine industry) for virtually all my working life, I would buy a few residential sites and only build a house on them when work was scarce so as not to loose the better members of my staff, and on completion, would only let if I could not get a quick sale. To get into commercial property and later industrial I roped in my younger brother and 4 like minded friends and build a little 2000 sq m shopping center and slowly over the years built it up to what I have today. Property is not "a get rich quick" thing, it is slow, but like compound interest it snowballs, and if you do it correctly 30 years later you will be pretty wealthy. However never forget it is a very illiquid asset, and you cannot cash in your chips overnight, and one last thought, remember this is Africa.
0 Kudos
Rams
Super Contributor
Property...now was there not some subprime mortgage bubble in 2008.... I am sure it was in the USA ...and we had a global financial crisis?
0 Kudos
Alonzo7
Frequent Contributor
Residential 'Buy to Let" worked very well for me. I bought a few "free standing homes" in good locations a few years back and I managed to achieve "Financial Freedom" at age 37. I managed my rental portfolio myself. Trust your instincts and go for it.If you "think" of it, and you "believe" it, then you will most likely "achieve" it.
0 Kudos
CHATTYCHAT
Super Contributor
Likewise, however not free standing: sectional title. There is an enormous market for spacious 2-bedroomed units. A trick is to pick them up at a reasonable price (do not pay the asking price and cut out the estate agent) and you could easily gross between 0,6% - 0,8% of MARKET value from day 1. After that the escalation factor looks after returns. The other requirements are: location of the property and selection process to land a good tenant. The latter is not too hard to find, because (inter alia) the location of the property eliminates the unwanted...
0 Kudos