Property Versus Shares

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’

Property Experts Can Help to Rebuild the Economy

Ireland’s economy depends largely on property which is why we desperately need property experts to help get us out of the recession. So why isn’t the Government using them?The wealth of the Irish nation was/is based on property values and the entire banking system was/is a leveraged play on property values: when property fell by a half the banks collapsed because they were more than 10 times leveraged.The current recession, then, has impacted Ireland dramatically because of the significant drop in property values. The recent €25 billion banking bailout and the €45 billion bailout in 2009/2010 were primarily necessitated by falls in property value.The risk now is that values will fall further, requiring more billions. Is anything being done to stop values falling? Can anything be done?Sometimes, when you are very close to the problem, you cannot craft a solution because you are overwhelmed by the problem and so are not thinking about the way to solve it.Do our policy makers really know anything about property values and their drivers? Is this the economic equivalent of the plague, with no one looking at fleas on the rats, or the potato famine, with no one looking for the bluestone spray?Has this Government access to an appropriate skill base that can halt and reverse the downward trend?The answer is a resounding “No.” It is relying on general economists and not urban economists or property experts, who frequent the property industry, and academia.Apart from a limited number of taxation-focused valuation specialists in the Valuations Office and OPW (and some fully occupied investment managers in Nama), the Government has no high-level property skills professionals at its disposal – none in the Department of Finance; none in the Central Bank; and none in the Department of Environment.Imagine running an airline without skilled pilots, engine technicians or navigators. Running an economy, now firmly proven to be grounded on property values, without these skills is surely unwise.Policy decision after policy decision is being made with little understanding of its effect on the intricate drivers of the Irish property industry and resultant effect on property values.The few economists that there are in Government are not qualified specialists in urban economists who are familiar with the detail of the property industry. While they may comment on high-level issues within the economy, they know little about the detailed workings of the property industry or the players or drivers of the property investment industry.The past Government incorrectly thought this “knowledge” came from their friends in the Galway tent – few of whom were Masters or PhD level urban economists.A bricklayer or carpenter turned developer might be a shrewd businessman – and he might be lucky – but he probably has no qualified understanding of property economics.In an economy that is “flying” normally, perhaps this can be tolerated, but when the going gets as tough – as it now has in Ireland – you need the equivalent of pilots, engine technicians and navigators to help prevent a crash landing.We have already had two such property-based “crash landings” in Ireland and still no one is looking at the fundamentals of why property values have collapsed and what can be done to halt or reverse the slide.Instead of seeking ways in which to understand the property industry and its macro and micro drivers, we get policy decision after policy decision that makes the situation even worse.Here are four examples:
• The 80 percent land value windfall tax destroyed the value of much development land and, by reducing the buy-in value to Nama, raised the cost of the banking bailout:• The Core Strategy policy of the 2010 Planning Act, by reducing the amount of zoned land, will add to the downward valuation of 50,000 hectares of former development land and will further undermine the banks and Nama’s asset base.• The upward/downward rent review policy proposals of the current government will knock about 20 per cent off the value of most property portfolios, further exasperating the banking problems. This has not been factored into the recent banking stress-test exercise.• The proposal to introduce rates on residential properties will further impact on house values.These may all be good policies in a normal economic environment but in what is the equivalent of a raging battlefield, they are like the troops smelling the roses or making daisy chains with the shells flying overhead.Is it any wonder that the international investment community won’t touch our Irish bonds or lend us money when thy can clearly see this madness.They understand urban economics even if we do not. When in a hole one should stop digging,Other industries have ministerial advisory groups so why not in the area of property? In overseas economies such as the UK and the US there are well-honed property advisory procedures in place.In the UK, the Property Industry Alliance submits regular updates to Government on issues affecting commercial property. Its most recent publication, of January 28th, gives a most detailed update on property debt risk relating to future trends in property values.In the US, the Urban Land Institute is probably the best property related think-tank in the world and gives direct advice to both the White House and the leaders of America’s property and financial services industries.The Government urgently needs to set up a high-level property advisory group, from national and international sources, from academia and the property industry.It needs to ask it to come up with strategies to halt and reverse the downward trend in property values and be given the mandate to look at the big picture as well as the fine tuning.It should be required to issue a preliminary report within three months of establishment.Every householder, investor, banker, and borrower would like to see some serious skills being applied to halting the downslide in values.The way to begin this is to assemble the brainpower that understands the industry and ask them to develop appropriate policies.Unfortunately, the old belief still prevails in Merrion Street and Dame Street – that simply because you own a house and built a kitchen extension, you understand the complexities of urban economics and property economics.What we are doing at present is equivalent to the 17th century practice of drawing blood from a sick patient.The skills are there – just mobilise the experts now and listen to their advice, please – for all our sakes.

Video To Increase Brand Awareness With Columbus Videography

To get your business booming, you need to get your brand into the minds of the people. A Columbus videographer is the right choice!

The Benefits of Professional Columbus Videography

Not only can videography add a cinematic quality to your videos, but it can also be used for a variety of other purposes. One reason Columbus videography is so popular for marketing and advertising is because it allows you to capture and preserve memories in a way that cannot be recreated – something that can be very powerful in increasing brand awareness.

Another benefit of professional videography is the fact that it gives you the ability to create videos in a number of different formats, making them perfect for any kind of media or platform. You can use videography to create short, engaging videos that are easy to share on social media or long form documentaries with intricate story lines that will captivate viewers.

No matter what your reasons are for needing videography, there are a variety of professionals who can help you achieve the results you want. Hiring a professional Videographer will result in videos that are unique and memorable, increasing your brand awareness and contributing to your success as an entrepreneur or business owner.

How Professional Videography Can Increase Brand Awareness

Video is one of the most powerful tools a business can use to increase brand awareness and grow its customer base. By creating video content, businesses can create a lasting impression on potential and current customers, as well as attract new ones. In addition to providing valuable information, video also conveys a sense of personality and professionalism that can be hard to beat.

Columbus videography for small businesses can help businesses achieve these goals in several ways. First, video content can be used to capture important moments in a company’s history or explain key concepts in a product or service. Second, video can be used to create engaging user experiences, which can lead to increased sales and loyalty. And finally, video can be used to promote a company’s brand and image to a wider audience.

By investing in professional videography, businesses can achieve tremendous benefits in both short and long term. With video content that is both informative and engaging, businesses can attract new customers and retain current ones. And by promoting a company’s brand and image to a wider audience, video can create a powerful sense of identity and superiority. In short, video is an incredibly powerful tool that can be used to achieve great success in any business.

Leveraging Professional Videography to Enhance Your Brand Image

Hiring a professional videographer can be an amazing way to increase brand awareness and boost your marketing efforts. The right videography can help you tell stories that are important to your business, complement your website and social media presence, and create compelling new content for your customers. A well-made video can also attract new customers, build relationships with current ones, and generate leads. In addition, hiring a professional will ensure that your videos look their best; without the right lighting and sound effects, your footage could end up looking amateurish and unprofessional. If your business is in food, a food video production company in Columbus will create a video that has as much style and substance as your food! Bottom line: With the right videography in place, you can maximize the impact of all your marketing materials – whether they’re websites, ads, or even just simple blog posts.

Maximizing the Impact of Your Professional Videography

Video can be a powerful marketing tool for businesses of all sizes. Professional videography can help you create compelling content that not only increases brand awareness, but also drives leads and sales. Here are some tips on how to maximize the impact of your video marketing efforts:

Choose the right videos: The first step in maximizing the impact of your video marketing is to choose the right videos to upload. Make sure each video represents your business accurately and provides valuable information or entertainment for potential customers. Additionally, make sure each video is well-made and engaging, so viewers will want to watch it all the way through.

Create interesting stories with strong visuals: Instead of simply presenting product features or selling services, try creating interesting stories with strong visuals. This will help you stand out from the competition and attract more viewers.

Use video to drive leads and sales: Video can be a powerful way to drive leads and sales. By creating compelling content, you can capture the attention of potential customers and convert them into leads or customers.

Optimize your video for social media: Make sure your videos are optimized for social media platforms like Facebook, Twitter, and LinkedIn. This will help you reach a wider audience and promote your content across the web.

By following these tips, you can maximize the impact of your professional videography and increase brand awareness.

Link Building Tips That Will Work in 2023

Ah, the elusive art of link building. It’s the SEO tactic that’s been around since the dawn of the internet, yet it remains one of the most challenging aspects of digital marketing. But fear not, my dear website owner, for I have some tips and tricks that will help you build links like a pro in 2023. And don’t worry, I’ll try to make it as humorous as possible. Let’s dive in!

First and foremost, let’s address the elephant in the room: link building is hard. Like, really hard. It’s a lot like trying to get a date in high school. You have to put yourself out there, make connections, and hope that someone takes notice. But unlike high school, you can’t just rely on your good looks and charm. You need to have something of value to offer.

So, how do you offer value in the world of link building? The answer is simple: create amazing content. Yes, I know, that sounds like a boring answer. But trust me, it’s the key to success. In 2023, the internet is going to be more crowded than ever. There will be millions of websites out there, all vying for attention. The only way to stand out is by creating content that is truly remarkable.

Think about it this way: would you rather link to a website that has a bunch of generic, keyword-stuffed blog posts, or would you rather link to a website that has a well-researched, thought-provoking article that makes you say “Wow, I never thought of it that way!”? I’m guessing you’d choose the latter. So, focus on creating content that is valuable, shareable, and unique.

Now that you have amazing content, how do you get other websites to link to it? That’s where outreach comes in. Outreach is the process of reaching out to other websites and asking them to link to your content. It’s a lot like asking your crush to prom, except you’re asking a website to give you a backlink. And just like with prom, there’s a right way and a wrong way to do it.

The wrong way to do outreach is by sending a generic email that says something like “Hey, can you link to my website? Thanks!” That’s like asking your crush to prom by saying “Hey, wanna go to prom with me? Thanks!” It’s not going to work. Instead, you need to personalize your outreach emails and make them relevant to the website you’re reaching out to.

For example, if you’re trying to get a backlink from a website that talks about hiking, you might say something like “Hey, I noticed that you wrote an article about the best hiking trails in California. I recently wrote an article about the best backpacks for hiking, and I thought it might be a good fit for your readers. Would you be interested in taking a look?” See how that’s personalized and relevant? That’s the kind of outreach that gets results.

But what if outreach isn’t working for you? What if you’ve sent out dozens of emails and haven’t gotten a single backlink? Don’t worry, there are other tactics you can try. One of my favorites is guest blogging.

Guest blogging is the process of writing an article for someone else’s website and getting a backlink in return. It’s like going on a blind date, except you get a link instead of awkward small talk. To find websites that accept guest posts, just do a Google search for “guest blogging + [your industry].” For example, if you’re in the fitness industry, you might search for “guest blogging + fitness.” Then, reach out to those websites and pitch them a guest post idea.

The key to guest blogging is to make sure that your article is high-quality and relevant to the website’s audience. Don’t just write a generic post and slap a link in it. Take the time to research the website’s audience and tailor your post to their interests. And make sure that your link is naturally included in the post, rather than just tacked on at the end.

Another tactic to try in 2023 is broken link building. Broken link building is the process of finding broken links on other websites and reaching out to the website owner to suggest a replacement link (which just happens to be to your own website). It’s like playing the hero and saving someone from a bad link.

To find broken links, you can use a tool like Ahrefs or SEMrush. Just enter a website’s URL and look for broken links in the “backlinks” or “referring domains” section. Then, reach out to the website owner and suggest a replacement link.

Finally, let’s talk about social media. In 2023, social media is going to be more important than ever for link building. Not only does social media help you promote your content and get it in front of more people, but it also helps you build relationships with other website owners and influencers in your industry.

The key to social media link building is to be active and engaged. Don’t just post your own content and hope for the best. Take the time to interact with other people in your industry, share their content, and build relationships. The more you give, the more you’ll get in return.

In conclusion, link building in 2023 is going to be challenging, but it’s not impossible. The key is to focus on creating amazing content, personalizing your outreach, and building relationships with other website owners and influencers in your industry. And remember, link building is a lot like dating. You need to put yourself out there, be persistent, and always be looking for new opportunities. Good luck, and happy link building!