By Steve Roulstone
As a Landlord with several houses purchased through my time as a Letting Agent it is nice to know that my investment in bricks and mortar has been well spent and even taking the current down turn in sales and property value, the investment stands up well against other investment opportunities.
Presentation figures.
As part of a process that I undertake with potential Franchisees, I have put together figures from several sources to confirm how property has performed against its rivals. I chose figures from the last ten years; indeed the last decade 2000 through to 2010 inclusive. It is not that as agents we have to convince people to buy property in the first place, far from it, we enter the scene when owners are deciding if either the market is what they want for their property, or if having made the decision, they wish the property to be managed by Agents rather than themselves. As I point out, it does no harm to be aware of how much better bricks and mortar have performed against what some would perceive as the normal route for investment.
Property v Stocks
Over the whole eleven year period, property produced 64% growth (National House price statistics) whilst stocks only gave a 6% return (Stock exchange growth figures) Now I am fully aware that the whole point of Stocks and Shares is to buy and sell but this is of course not needed for property so I believe it fair to directly compare one with the other. I am also aware that S&S pay dividends and the average return over the same period was an additional 20%, but then rent also counts and on average, Landlords make 10% of the rent after mortgages have been paid. When both are taken in too account property still looks ahead of the game by some way!
Not forgetting inflation.
I added inflation in (3% gain and 3% inflation = 0% growth) and then looked at information from the Barclays Capital Guilt study 2010 which did the same for Shares, Bonds and Cash. The outcome for property allowing inflation at 28.2% and after paying Tax at 25% gave property at a return of 38% and the best that either Bonds or Cash could offer after inflation was less than 3%, with shares actually losing money! Quite a result I am sure you would agree, as property outperforms its rivals to the power of 10 which all points to Money well invested!
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