Bank deposits rivals rentals

[ActionMan]

http://www.nzherald.co.nz/section/story.cfm?c_id=3&objectid=10391568

Interesting read.
In line with what Gatekeeper and McDuck have been saying.

[Dean@Massiveaction]

But once you factor in tax, depreciation, capital growth AND the fact you are not using your own money this is nonsense. There is no comparison at all unless you were using all your own money for property. :-)

[LondonKiwi]

Yep have to agree what they don't factor in is the use of someone else's money (Banks) and that someone else is paying the mortgage off (tenants). Very difficult to compare the two just based on yield alone!!!

LK

[revdev]

What a mouthful...

Actionman, I tried to read the article but got stuck on the authors name..Martha McKenzie-Minifie

Must be why I can't take bank deposits seriously...

G

[Kay]

Property still performs best, but not if you were looking to buy now. The prices at the moment are crazy, but if you add value to your properties and wait for he 'motivated' seller, who has to sell in a hurry - Then you can use your spare equity to buy at a good price.

[David_W]

Agree with Poomba and LondonKiwi - leverage, tax deductibility benefits, capital gains need to be taken into account.

Also I disagree with Kay - it is still a great time to buy property. You have so many options: buy property that you can add value to and/or buy below valuation, and still create good positive after tax cashflow, or even simply trade properties to generate cashflow. It is just a story that too many people tell themselves that they can't make money at the moment in property. I am making great money in property right now, as are my co workers, clients and colleagues. Tell yourself you can make money in property, back yourself and just do it!

[kalovatt]

Its only a good comparison once you have achieved an IP freehold. Then you can compare your 6% gross return less expenses and hassels to a 7.4% gross bank return