Real Estate Vs Stocks: Which One Will Give You A Better Return? | Real Estate Investing Vs Shares

I've always wondered: real estate vs stocks: which one will give you a better return on investment? I struggle deciding whether I should invest money in real estate or in the stock market, so in this video I go through the pros and cons and which one can give you a better return on investment. I hope this video can answer some of your questions! Make sure you stay until the end because I’ll be doing a comparison of which one can give you a better return on investment on $120,000 after 30 years. Honestly the results really surprised me. I hope you enjoy this!

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Disclaimer: I'm not a financial advisor. The information in this video is general and is not professional advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Ultimately you are responsible for the financial decisions you make.

[InvestWithQueenie]

What do you prefer to invest in - real estate or the stock market? Let me know in the comments 😊

[kimlenghak]

Another expense of real estate is CGT 50% after sold in Au. Anyway, Great Advice.

[GAZMAN]

What about the cost of maintenance of the property and the taxes on rental income over 30 years. Also etfs do have yearly fees as they are managed

[CompoundingEverything]

Great video Queenie! Not too sure if 7% is sustainable over a 30 year period in property moving forward in Australia, but who knows! Keep in mind maintenance and other property-related costs (they really do add up over a longer period) plus times where the property may sit vacant which could be anywhere between 1-10% of that 30 year period (depending on the area). No doubt property can definitely be a better investment for some who aren't as comfortable entering the market, really enjoyed the way you put together this video!

[henrychen]

Awesome stuff Queenie! Love how you included the opportunity cost of mortgage repayments (investing in shares) in your comparison. Have some feedback that I hope can help you.

I think 7% growth long term is a little too optimistic for property prices. Fundamentally, property prices are mainly driven by population growth (housing demand) and lower interest rates (cost of borrowing). With (cash) rates being cut to basically 0 over the last 30 years, that driver has been exhausted so you're left with population growth (~2% in Australia). You don't want to extrapolate the last decade of property market speculation too far.

Stock indexes are driven by population growth and lower rates but also productivity and technological advancements. These extra factors have allowed stocks to outperform property historically over the long term. You can be more confident that productivity and technology will continue to improve and generate a 5-7% annual return in global stock indexes.

There are a few other costs/cons to property to factor in. Firstly, there's maintenance/renovation and insurance costs. No one reports these but everyone incurs them (yearly). You could probably use your own costs as an estimate. Secondly, its difficult to diversify with an investment property. You're tied to one property in one suburb in one city. This virus has prompted a rethink of living in the CBD etc. Who knows what can happen in the future. When holding a diversified market ETF, it doesn't matter if a few companies go bust because others will succeed in their place.

My view is a well diversified stock portfolio is a superior investment to property given the better returns, diversification, ongoing cash flow and liquidity. That being said, there's a lot of emotional value to owning a home which you can't put a number on!

[pat_bee]

I still prefer shares, I can save up for a PPoR one day while also investing in shares but the concept of being in a position to have two properties sounds like you'd need to really love working and climbing the ladder of your industry or just be okay with working like hell. Time wise too with the whole 30 years deal, I can start now with shares but who knows how long itll take to get into a position where i'm buying an investment property and not just a PPoR. Good information though for people who find themselves in a position where they have 120k to invest

[DemetriPanici]

I think a good balance of both really gives you a nice diversified portfolio! I’m down for both!

[MAKEMONEYMARK]

1000 subs. Good job! Keep up the good work and momentum!

[hughjackson]

If you take the time to learn how to invest in shares, getting between 10%-20% is very achievable. I've been able to get over 30% for the past 6 years. Follow the principles of value investing, and you'll be surprised how easy it is to make money. The best books to read are: Rule 1 by Phil Town, the Dhando Investor and the Intelligent Investor (read the Intelligent Investor last as it's more complex). I'm not saying Real estate investing is bad, but being an active investor is loads of fun and can be lucrative.

[sayuritube]

Thank you for doing this! I live in Australia, and it's so hard to find Australia-specific channels. You explain this so simply, and it's great to see a fellow young person being so knowledgeable about this stuff. Proud of you. :) 

I'd love to see a video about how to choose your financial team - how did you find your tax agent, your financial planner, property manager, etc, when there are so many people competing for your business? Maybe a video about "getting your financial house in order" might be good!

[chiragdarji]

The key benefit with real estate is leverage. If you buy really below value, or add value to property. You can recycle the capital/equity and purchase property 2, property 3, etc... a carefully thoughout plan could also ensure that cashflow remains on point. Its effectively no money down.

[IsFIREforme]

Majority of my investments are in real estate. Just now learning the stock market to diversify some

[felixisidoro]

Ive gotten the hang of the stock market now i wanna learn the real estate path!😅 diversify a bit!

[gkpaul]

Started buying shares at 6 and first property at 18 so i like both but think property is slightly safer and i love the steady rent income coming in.

[geniusgenesect]

What is your minimum return on real estate before you’d consider it over stocks?

[johnroybal]

SMART LADY! I AGREE, REAL ESTATE IS THE WAY TO GO.

[luciap]

Thanks for this video, it's really helpful! Going look into it more, but leaning towards real estate investing now.

[rexross]

I get the concept however there is no way the majority of properties would go up that much in worth over 30 years.
I personally would prefer shares over property, there is just too much cost involved with buying property.

[Mihir.Bhadauria]

I was shocked by the results as well. Real estate is quite a fast way (10ish years lol) to make money compared to stocks but the reason why I prefer property more than stocks is the control factor. We can look at things such as balance sheets and statements issued by companies however depending on our ownership we don't have much power to dictate certain actions.

Both are leveraging in somewhat different ways. Stocks is leveraging other people's time and expertise whilst real estate leverages demand from high-income earners and scarcity in good growth areas.

Great video, I also didn't see that you popped off and reached over 1k subscribers. Congratulations 🎊

[KelechIwuaba]

Started off with Stock and will go into real estate soon. Stocks is just easier to start off with especially now with entry being so cheap.