Is it Better to Invest in Property or the Stock Market?

Should we invest in the stock market or in the property market? This is not a simple question, but in this video, we will look at the pros and cons of both types of investment and also their historic returns and risk to see which has performed the best.

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Timestamps
00:00 Introduction
00:24 What Kind of Property?
00:50 Pros and Cons
10:44 Which gives you the best return on investment?
17:14 Conclusion

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DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.

[me]

Property is far too much of a hassle for me. I'm sticking to broad market index funds plus a few ETFs which I can auto-DCA and forget.

[VegasMilgauss]

My Vanguard boiler never breaks down and the roof never leaks.

[spartacusptolemaida]

Liquidity plays a big part. You can literally get rid of your funds within seconds. Imagine having to find a buyer and and lawyers and so many hidden fees if you wanna sell your property.

[bosshog]

I'm invested in both, the stock market is more liquid and less hassle than dealing with property.

[Willycheng]

Hi Ramin. I just stumbled on your channel. I put in 20k into various assets last year and flipped into six figures within a few months and still going. I’ve always been an advocate of investing because it has been rather rewarding. I hope to attain financial freedom soon. One more thing, great content brother.

[marinaderosario]

Another negative for btls are increased legislation and a general sentiment that landlords are the source of all evil. The level of hassle is high

[k]

There is one feature that makes or breaks above all the factors you mention, you are unable to sell a portion of a house (a room) if you need to cash in for whatever reason, I can always sell 5% or 10% of my portfolio within my ISA and after 2 working days the money is on the bank, it takes me a minute. Maybe the alternative is to extend the B2L mortgage (if you find the bank and the cost of the transaction it is not too high.... takes a lot effort / time / money)

[iang]

And to think I went and saw a financial advisor from unbiased just this end of March. Granted, it was only an assessment, but I should've just waited instead hahahaha. appreciate the video Ramin

[getreal]

RoA - Return on Arse, love it Ramin !

[carlyndolphin]

I’m 50% invested in property and 50% invested in Vanguard VWRP global index fund. I helps me sleep better

[ianschofield]

In the UK a second property is liable for capital gains tax. Yes you can off set some property costs, but it’s still a big chunk of money and the government seem to be reducing capital gains allowance to almost nothing.

[stevegeek]

I'm just getting into BTL alongside my stocks (SIPP and ISA) and agree with all the points raised here. Another pro for property is that as a retired person, buying and renovating a house has certainly given plenty to do...no chance of getting bored in retirement!

[oneworldcafe]

I would hold both stocks and residential property. Leverage is the trump card with holding property. Also you can add value by improving or extending property. Its more work though.

[kevinu.k.]

A great video - again. :)
Anyone thinking about going into property / renting needs to look at the local market. National figures are not very useful.
For my London flat I get about 4% after overheads and before inflation is subtracted.
The government has been increasing regulations too and this looks likely to continue. So, there can be big surprise bills. Insulation and new electrical standards are current examples.
I am now selling my flat. It just does not have the yield in the current market conditions.

[MarkCW]

I'm roughly 50/50 between financial and BTL net assets which works well for me. The BTL gives me a steady income so that I don't have to keep on drawing down from my equities. I use an agency (10% commission) to reduce the hassle of maintaining the properties. If you look after your properties well the costs are high (24% of gross rent n my case). The rental income has gone up faster than inflation but I do worry about interest rates and inflation coming down over the next 3 years.

[TabulaRasa]

Provided much info I didn't know before but perhaps 3 possible omissions 1) didn't mention leveraged equity products e.g. leveraged ETFs which can multiply 2/3x an indexes gains 2) the increasing legal/compliance burden of owning property 3) can lose all your money in equity whilst property/land will always retain some value

[daverichardhadley]

The home that you live in does generate a kind of rental income, the rent that you are not paying by living there. When that is taken into account, its returns can look much better.

[dhuryodhankaurav]

One important differentiation is the ability to utilize leverage... If you're looking to take advantage of an economic boom-bust cycle, properties give you the chance to pocket more profit... I know trading is not the idea for this channel... just thought it is worth putting it out there

[lajollapowell]

The reason why I started investing in property was for this very reason. My pension was invested (in the 80’s/90’s) in Equities and that period was very volatile. Exchange rate mechanism equities prices and pension funds going bust. It wasn’t a good time. Having something I could touch and feel was important to me.

I hold both - and it has made me feel more secure and able to not worry about the long term!

[jameswalker]

Fun fact: The prices of Prime Central London residential property has not moved since 2014. In fact, it has dropped slightly. In inflation adjusted terms, there is a very large loss.