Invest in houses or stocks/bonds?

Randomname123

Remember reading a while ago that nobody really knows what the best investment is, if there was such a thing as a best investment everyone would be doing it.

I have read books on both house investing and stocks/bonds, I am not at the point where I have enough even for a mortgage on a house, but does it even matter what you invest in whether it be stocks/bonds vs houses? Yeah i'd prefer a house as you actually get to live in it, but still - is it wrong to say that you shouldn't invest in stocks because houses are better?

I have a friend the same age that invests in stocks for now, but said he will invest in a house when he has the money. Reading real estate books are a lot easier than the books i've read on stocks though.

masonic

Over long enough time periods, investing in the stockmarket would have tended to give the best returns, but that won't necessarily be true over the timeframe you decide to invest for.

Investing in property is not such a great option by comparison, but owning the home in which you live has the added advantage that you no longer pay rent out of your taxed income (although while you have a mortgage, you are renting from the bank to some extent). It is usually worth prioritising buying a house to live in over other investments if possible.

Investing in S&S can be as simple or as complex as you want it to be. At the simple end, sticking money into a diversified multi-asset fund is much simpler than buying a house IMHO.

steviecoyle

There is no reason why you cannot purchase a house and also invest in S&S. Most investors have portfolio's that also include property. If you can still get it on the ITV player. I would watch Martin's TV show that was on recently. There was great information on Mortgages, and other stuff.

If you have money already saved, then using a large portion of that money to use as a deposit, and then the rest could be invested. Best option if you have a large amount of money to invest, is go see a few Financial Adviser.

Ifts

You could do both. Buy a house to live in first (if you can live with a lodger you can rent a room for £7,500 per year tax-free).
And when investing in S&S do it through a S&S Isa - no tax on dividends or CGT on any profits inside the Isa wrapper.


This article discusses - Buy to let vs Stocks & Shares ISA