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n, I have not included lawyers’ fees, agents’ fees or stamp duty. Admittedly buying a property has more additional costs than buying shares, but this would not make a significant difference on your profits - around 4% in the UK, higher overseas.
One thing to point out is that in the short term you have greatly increased your potential loss i.e. if the property went down by 10% in value, you would lose more of your initial investment, because the property value would go down to £90,000, you still owe the bank £80,000, so you now have £10,000. In comparison if the stock market dropped by 10%, your investment would be worth £18,000, as only lose 10% of £20,000.
However over a length of time, using leverage to good effect and using all the other skills you need when buying property, property is by far the best investment, for the majority of individuals.
The figures I have used have been very conservative, many individuals are making far more than this on property, whereas anyone making the same returns on the stock market, will generally be benefiting from some sort of insider dealing or be very high up in the company, I would imagine!
About The Author
Alan Forsyth is a full time property investor and developer with 10 years experience in UK and overseas. He is managing director of http://www.property-investment-tips.com which offers free independent advice and tips on property investment, courses, countries, strategies, mortgages and much more - with a free newsletter every 3 weeks giving latest tips and offers to over 1000 investors. Sign up today at the site for free independent advice!
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