Which is better, funding for retirement through property or using an investment vehicle such as an RA?
Diversification is always the best solution. This means it’s best to spread the risk and not to ‘put all your eggs in one basket’. A large percentage of South Africans have fallen into the trap of believing that property will out-perform other forms of investments and asset classes, however this is not true. Due to the property boom between 2003 and 2008, property prices escalated rapidly, however this was the exception not the rule. Besides all the obvious associated risks with property investment, such as rentals, tenants, maintenance, fluctuating interest rates, bond repayments and non liquidity, over the last 30 year period from 1980 to 2009, residential house prices beat inflation by only 0.75% per year. Comparing this performance with other asset classes, the JSE all share index has given investors annualised returns of 18% over the last 30 years and government bonds gave an annualised returns of 14% over the same period. Listed property (in the form of property unit trusts on th
Related Questions
- My commercial property was just acquired by a public retirement system for investment purposes. May I build a new commercial building on a parcel I purchased two years ago as my replacement property?
- Can Rental Property Investment Be a Reliable Retirement Investment Vehicle?
- What is a Residential Investment Property and Why is it Important to You?
