Sizing up whether you should invest in the stock market or property

The long-running argument as to whether property or the stock exchange gives the best returns was one of the topics raised at an early 2010 planning meeting at Greeff Properties' Camps Bay branch, says Marion Taylor, Greeff Properties director for the Atlantic Seaboard.

I told some of my agents that they could recommend apartments as investments with complete confidence, especially if these are in the Camps Bay Atlantic Seaboard precinct.

Obviously from time-to-time you will come across clients who are extremely competent stock exchange analysts and who will be able to tell you about spectacular returns achieved on the JSE. No one argues that this is possible to the real experts. We have clients, for example, who bought WBHO shares less than a decade ago at under R3 and who are now seeing them valued at close to R110. However, this type of expertise is not easy to come by and in my experience the average stock exchange investor has to work on hearsay and dinner table talk. For that type of investor property has always been the safer investment channel.

One example of a property investment success: In 1985 I assisted a relative to buy four apartment blocks in the City Bowl with 20 units in all. The price paid was just under R500 000 for all four blocks.

That investment is now generating over R100 000 per month in rental income - rentals have continued to rise consistently despite the recession. Right now, in fact, residential property is leading the recovery out of the downturn. Well located apartments as long term, income producing investments cannot be beaten. There is also the added benefit of consistent capital appreciation and, if necessary, the investment is easily converted into cash.

Article by: Marion Taylor - www.realestateweb.co.za