Property vs Shares / ETFs

Hi Alex,

Probably the most debated question in all of finance. The answer is, both can work and they have different features.

Many people choose to invest in property to build wealth using high levels of leverage, which are unique to residential property. Downsides can be long periods of negative cashflow, large costs such as stamp duty, and uncertain growth with periods of flat or poor performance.

Most property in Australia also has pretty low rental yields after all costs are accounted for, meaning it’s not a great income generator in retirement even if it’s paid off.

For this reason, many investors later choose shares for an income stream, regardless of whether they’ve invested in property or not to build their wealth. There are basically no costs, it’s simpler, and more tax efficient. The main downside of course is the occasional big market decline, which is enough to put some people off by itself.

It’s really a huge discussion with many different variables to consider. If you’re interested, I explored this topic in detail in my book (shameless plug), which you could get from the library for free (they can order it for you), or on Spotify/Audible if you have a plan with them, or the ebook/paper version on Amazon.

Strong Money Australia book page: https://strongmoneyaustralia.com/book/