If you have been planning on investing, there are two main options available to you – stocks and shares or property. There’s plenty of debate around the subject, and which one is best depends on you and your needs. Both have advantages and disadvantages, and it is important to consider these before you decide to invest.
One of the best and most popular options is investing in property, and there are over two million property investors in the UK. Property investment has multiple benefits including capital appreciation – the amount that your property goes up over time. Another benefit of property investment is the option of letting out your property to tenants. Buy to let property investment continues to be a lucrative way of generating income, as rents are rising across the UK and there is a huge demand for high-quality rental properties. There are other costs to consider when it comes to investing in property, like legal fees and tax implications, so it is important to do your research.
Property investment firm RW Invest have a range of property investment opportunities in high performing areas, which have the potential for a substantial increase in value and competitive rental yields too. For example, an apartment purchased from RW Invest for £57,950 in Manor Mill is now worth £120,000, an increase of 107% and a property purchased in Skyline Apartments for £105,000 is now worth £190,000 – an 80% increase in value. House prices continue to rise over time, and the longer you hold on to your property, the more likely it will be to increase in value.
Investing in stocks and shares also has plenty of benefits. This form of investment means you purchase tiny fractions of a company; therefore, you own some of the value of a company, and as that value rises, the value of your shares rises too. Some companies also pay out a share of the profits to their shareholders, called dividends. You can choose what assets you would like to invest in, and choose companies you are confident in, however investing shares can be a complicated process, and you will need a lot of knowledge or a broker.
You can also invest in a stocks and shares ISA or through a fund, where a lot of people pool their investments and the funds are chosen by a professional fund manager. However, there are some definite drawbacks as well. The value of stocks and shares can go up as well as down, and unlike property, which is a brick and mortar asset, they are an intangible asset. It can also be a complicated process, with lots of extra charges like cost per sale, and if there aren’t buyers it can be difficult to sell shares.
One way of comparing property versus stocks and shares is by looking at how the rise in property values compares to the FTSE (Financial Times Stock Exchange 100). Between 2000 and 2017, the average value of a UK home outpaced the Financial Times Stock Exchange 100 (FTSE), which is a promising sign for property investment. Obviously, this is a simplified version of the facts and there are other factors to consider, but as a basic indicator, it seems like property could outperform stocks and shares.