If you have not asked yourself the question you have probably heard it raised – ‘so what’s a better investment, property or shares?’ The forum is typically a backyard BBQ between family and friends and sure enough it will spark interest with certain ardent supporters of one asset class over the other, keen to add to the mix their 2 cents worth of home spun wisdom.Having heard one too many ill-informed responses to this question, I have decided to write this short article outlining my view on the question. As a property investor, share investor and qualified financial planner I will hopefully provide you with a more intuitive response than those you may have heard in the past.Let’s first take a look at the reasons for investing in property and shares respectively.Reasons to Invest in PropertyEasier to understand – Property investment is generally more easily understood than share investment. Although property investment requires a certain level of sophistication it does not require the same degree of technical understanding that share investing does.Tangibility – Property investment provides tangible evidence of where your hard earned money is going. It is much more satisfying walking through your own investment property than through the aisles of a Woolworths store in which you are a shareholder.Control – Investing in property provides the investor with a greater level of control over their investment. When making decisions the property investor has complete influence over their investment unlike a share investor whose influence is only as great as their voting power.Potential to add value – Property provides the investor with the opportunity to improve its value either through renovation or development. This ability is not available with shares short of becoming a member of the board or creating your own publicly listed company.High gearing – Property enables investors with relatively small amounts of money to obtain exposure to relatively large assets. Property is a favoured form of security for banks and under certain circumstances may be fully financed with no recourse beyond the property. Shares on the other hand are generally financed at a maximum of 70% and the lender has recourse by way of margin calls against the investor when the LVR is breached.Low volatility – Property has historically provided low volatility relative to shares, although the infrequency of its valuation does bias the results.High long term returns – Property has historically provided high long term returns, particularly in comparison to fixed interest and cash.Tax efficiency – Property has a high degree of tax efficiency for a number of reasons. Firstly, its returns are comprised of a growth component that may be concessionally taxed (if held for over 12 months) using the capital gains tax discount. Secondly, property can be highly geared which results in a high deductible interest component. Thirdly, property allows the deduction of a depreciation component for building write off and plant and equipment which improves the after tax return.Reasons to Invest in SharesHigh liquidity – Shares generally provide higher liquidity than property. Whilst a line of credit facility secured against a property can help the matter, it is not always desirable to increase ones borrowings when cash is required.High Divisibility – A share portfolio is much more easily divisible than a property portfolio so when small amounts of cash is required a share investor can sell down a similar value of shares where a property investor is forced to sell an entire property.Low minimum investment – Shares provide the opportunity to invest smaller amounts of money than property. If you only have $5,000 to invest you will have no problems finding shares to purchase but good luck finding an investment property for this amount of money.Low transaction costs – Shares involve substantially lower transaction costs than property. The only costs involved in transacting shares are brokerage on both acquisition and disposal. Property on the other hand involves stamp duty, inspections, and legals on acquisition and advertising, agent’s commission and legals on disposal.Low ongoing costs – Shares involve substantially lower ongoing costs than property. In fact, direct share ownership does not involve any ongoing costs whereas property can involve body corporate fees, insurance, land tax, letting fees, maintenance costs, management fees, rates, and repair costs.Diversification – Due to the lower price of a share relative to a property it is possible to obtain greater diversification for your dollar by investing in shares. For example, if you have $100,000 to invest you may decide to spread it in $5,000 bundles across 20 different companies from 20 different sectors of the market. For an equivalent amount of money you would be lucky to purchase just one property without gearing.Timely performance appraisal – Shares in publicly listed companies enable the investor to make a timely assessment of the value and performance of their portfolio. The share investor can simply call their broker or view their portfolio value online whereas the property investor must obtain market appraisals and or valuations on each of their properties before being in a position to appraise the performance and value of their portfolio.High long term returns – Just like property shares have historically provided high long term returns, particularly in comparison to fixed interest and cash.Tax efficiency – Shares have a very high degree of tax efficiency for a number of reasons. Firstly, its returns are comprised of a growth component that may be concessionally taxed (if held for over 12 months) using the capital gains tax discount. Secondly, shares can be relatively highly geared which results in a relatively high deductible interest component. Thirdly, many Australian shares provide franking credits with their dividends that may be used to offset the investors other tax liabilities. Put another way, the dividend income from a fully franked share provides tax free income to a share investor on the 30% marginal tax rate.The ReturnsAt the end of the day you can have all of the before mentioned benefits but the bottom line for most investors is returns. Whilst we all know that past performance is no guarantee of future performance we are all nonetheless interested in how asset classes have performed in the past. As such, let’s now turn our attention to property and share historical returns.Over the years I have seen ardent supporters from both sides of the camp waving research papers in the air substantiating their claim that their favoured asset class has historically provided the highest return. Some have property marginally outperforming shares and some have shares marginally outperforming property on either a pre tax or post tax basis.How is this possible you might ask? Well, it all comes back to the measurement period of the research. As with all other asset classes, property and share values move in cycles. It therefore stands to reason that a measurement period incorporating more peaks and fewer troughs will provide a greater return for the period. Given that property and shares generally do not move in harmony with one another they each have peaks and troughs at different times in the cycle. Different measurements periods capture this and can therefore provide substantial variations in results.Below are the results from an ASX commissioned report prepared by Towns Perrin. The measurement period is only 1 year apart and spans for a considerable amount of time to provide more relevant information. 10 Years To December 2003Property 12.7%Shares 8.0%20 Years To December 2003Property 15.1%Shares 11.7%10 Years To December 2004Property 11.6%Shares 11.7%To December 2004Property 12.9%Shares 13.2%Source: ASX Investment Sector Performance Report by Towns PerrinSo what can we make of these results. Well, simply that both property and shares have each provided relatively high long term returns in excess of any other traditional asset classes.ConclusionProperty or shares? Given the comparability in historical returns and the many benefits they each present it should be obvious that the question shouldn’t be property or shares, but instead how much property and how much shares.So next time you are at a backyard BBQ and your ill-informed friend pipes up about property or shares being far superior to the other, politely reveal to them their ignorance and encourage them to seek professional financial advice!Oh, and when it comes to purchasing property for your portfolio, don’t pay retail price like everyone else, acquire your property the smart way by developing it at absolute developers cost. It’s easier than you think…By Luke AndersenPartner of Positive Property Strategies and co-author of ‘Residential Real Estate Development: A Practical Guide For Beginners To Experts’
Many people hear about making money online and think it is all a scam. Although this theory has its justifications, the idea in itself is not entirely a scam. You can make money online and not be the victim of any kind of scam. Here are some ways to really make money from home without being the victim of any kind of scam.The biggest fear of a person is legitimate. Nobody wants to do a bunch of work and never get paid for it. And many companies will expect you to do this. They will scam you and end up paying you nothing, or pay you very little for services where you otherwise could have made a good amount of money. But there are some very quality ways to make money out there.You can write for money if you like to write. This is a very popular source of online income. The demand for words is overwhelming. For a writer, it is hard to understand really how difficult it can be to write anything that people will want to read. And interesting text is one of the main things that gain any website popularity. Writing is a very high demand service, especially with the constant updating of old information and new information being put up all over the Internet.If you don’t write, maybe you do something else. People are always looking for designers of two kinds. You can make money online in a great amount with either of these. The first of these is graphic design. Freelance graphic designers can make a substantial income working only from project to project. They don’t even have to work full time, either. Pay is more with this, so going through a third party that can guarantee your payment is always a good idea.Website design is another incredibly popular way to make money online. Although the amount of people that know how to build web pages is drastically increasing, the amount of people wanting web pages is increasing in a much larger amount. This creates more and more of a demand for individuals that know how to build web pages. This knowledge could get you quite a bit of money if you can quickly and effectively create simple sites for people.Another way to make money online is to advertise for other companies through a process called affiliate marketing. All you need is your own web space. Then, you just post the links to the company’s website in an ad or an article and wait for someone to click. When they click, you earn. You don’t have to do anything else. People often worry that this is a scam. And while it is not a scam, you may not make a whole lot doing it.The Internet is a scary thing for many people, and when they hear of making money online, they are a little cautious about it. But there is really not as much to worry about as people think. You can make money online.
Whether you’re in the market for a major interior overhaul or you’re simply looking to give your home a quick and easy update, chances are you’ve spent some time online hunting for ideas and inspiration. That said, it can be pretty deflating to stumble upon a look you love only to discover the price to achieve it is well above your budget.
Fortunately, there are some killer home decorating blogs that show you how to refresh, revive, and fall in love with your home anew without breaking the bank. For a home that looks far more expensive than it costs to create, check out the following blogs for all of the interior inspiration and DIY tutorials you’ll ever need.
Welcome back to the week 5 update for the One Room Challenge. Check out the blog posts and updates for week 1, week 2, week 3, and week 4 if you missed them. It’s crunch time now and I’ll be honest… I don’t know that this project will be completely wrapped up for the reveal date. The great thing is the reveal and hitting a deadline is not the only goal of reason for this challenge. Ultimately having a fully functional and hopefully beautiful bathroom is where we want to end up even it things are a bit delayed.
Disclosure: this post contains affiliate links.
When we left off last time the countertops had been templated, the trim was freshly painted and the hardware had been ordered. The hardware took about 1 week to arrive. We chose the Menlo Park 4″ pull from Schlub in chrome because I think the pull has the perfect mix of square and some rounded elements that make it a great transitional hardware option. We went with all pulls for the drawers and doors since the knob option in that line weren’t our favorite.
Guest Bathroom Reno: Quartz Countertops and Grout – One Room Challenge Week 5
The quartz countertops are now installed and things can be put back together. Rectangle, undercount sinks were also purchased through the fabricator. The Marble look quartz from Pental and it is gorgeous with the warm gray veins running throughout. For the edge went for a flat polish eased edge for a clean, simple look.
Guest Bathroom Reno: Quartz Countertops and Grout – One Room Challenge Week 5
Two days after the quartz countertops were installed the tile installer came back to finish up tiling the niches, installing the tile base and grout everything.
Guest Bathroom Reno: Quartz Countertops and Grout – One Room Challenge Week 5
The electoral is being relocated for the new lights. There are some drywall and painting touch ups to do and plumbing fixtures to be hooked up. Plus adding all the finishing touches ???? All those little things like towel hooks, curtain rod, and accessories will bring this whole thing together.
It’s been too long since I’ve updated and even longer since this work has been started. This is me sharing remodel updates, mostly for myself (but also for my nagging family members). I’m sharing photos of the progress that has been made while also document the craziness that has gone on. This is just the beginning of the remodel.
Prior to moving in I had 3-4 weeks where my apartment lease overlapped with the possession of my townhome. This allowed me, with the amazing help of my family, to paint, tear-out carpet and somewhat put back together the upstairs portion of my place so that I could have a clean room to put a bed. At least one that wasn’t completely torn apart. One area that felt more livable that the rest. If you haven’t seen or don’t remember these are the before photos from when I took possession. To list it out here are the main things that I was tacking during those week prior to me moving in.
Phase 1 Remodel Projects
ripping out baseboard, carpet and tack strips upstairs and preparing for new hard surface flooring. (this flooring will go throughout minus the stairs and bathrooms/laundry)
installing flooring upstairs (one of my installers did this)
mostly gutting the master bathroom
installing a new tub and rough in plumbing for the master and powder bath
ordering and installing a rift white oak vanity for the master
Painting (and priming where needed) the ceilings and walls of the bedrooms. Caulking and painting the crown molding in the master
replacing and upgrading the baseboard heater in the master and patch the drywall
painting the hallway and down through the stairwell
adding skirt board to the stairs
installing new carpet and pad on the stairs (my carpet installer from work did this)
removing upper cabinets on the fridge side in the kitchen
partially demoing the wall diving the kitchen (prepare to move switches, outlets, heater and thermostat)
removing drywall on wall next to bar in dining area
painting the downstairs powder bath and removing vanity to prepare for a new floating vanity
Those were the main projects that took place and then I moved in the day after Thanksgiving. Getting rid of the original, nasty cat carpet and new flooring made a huge difference to the upstairs. Also neutralizing and lightening the paint made things feel so much more fresh. I still have no baseboards but I’ll get on that one day! For now here are some photos that I snapped along the way.
It’s been a while since been posting on here but I have some new updates and projects that I have been working on. Last summer into fall I was house hunting while knowing the lease on my apartment would be expiring end of the 2019. It felt a little crazy but was a fun process for me. After a bunch of searching I found and closed on a new home!
I was lucky enough to have a few weeks of overlap with my apartment (I ended up moving out 1 month early) so I was able to get started on projects and updates prior to moving in. I’ll share more about those in the coming weeks (there are still so many unfinished things!) but for now I think it’s best to start with some before photos. Also, follow along on Instagram where I post current project updates more often. The pictures show it in the state I bought it in. It’s a great first place to me and was functional as-is but as you might expect I’m here to make things my own by doing updates that I will enjoy while living here and that will also add value and functionality to the space down the line when I sell… or maybe even keep it as a rental. My dog, Nova, has been enjoying the space as well ???? There are a couple of things to miss about my Bothell apartment but I am very ready to have my own place and space.
In 2017 the guest bathroom was remodeled. You can see more photos and read about that here. Almost everything came out and all new things went back in. From emails and comments people have been asking for sources so I have rounded up what I could in this post to share paint colors, products and links that I could find for the bathroom.
Bathroom Sources and Details:
Wall color: BM Balboa Mist
Trim and door color: BM Chantilly Lace
Floor Tile: Pental Mark Chrome 12×24 matte
Shower tile: Jeffrey Court Weather Gray 4×12 gloss subway
Niche tile: Daltile clio mosaic
Bathtub: Maax Rubix tub
Cabinet: Spencer Cabinets – painted BM Cape May Cobblestone
Countertop: Pental Quartz Misterio polished 3cm
Cabinet hardware: Schaub Menlo Park Pull in chrome
Faucets: Hansgrohe Metris single handle in chrome
Shower trims: Kohler slide bar kit, wall mount supply and Hansgrohe tub spout in chrome
Mirrors: Homegoods
Towel Hooks: Delta Tolva robe hook in chrome