divinejourney
New member
@nailz I just used that as an example for why you can’t look at inflation adjusted returns for property. It wasn’t meant to be an accurate example.
But a good example of how property can create good returns is mine. I bought my investment property on a 95% LVR in 2019 (pre-election). Accounting for all expenses and mortgage payments, the return on my equity (including stamp plus all other costs) has been around 80% p.a. (My LVR is now around 65%, mainly due to 45-50% price growth since when I bought it).
Is this going to be the experience for most property investors? Absolutely not. But, the majority of the wealth in this country has been built from property, and there’s a reason for that.
The problem with a 40-50% leveraged equity portfolio is that you can get margin called. If you use nab equity builder to avoid the margin call, your borrowing capacity will be limited by income and also your interest rate is higher.
Personally, I consider a 50% LVR on shares to be a similar risk profile as 95% LVR on a property. It really depends on your job security. I have a super secure job, so a 95% LVR on property is less risky because I can always just not sell, whereas if the stock market tanks I can still get margin called (unless you use nab EB, but then your borrowing capacity is severely limited).
But a good example of how property can create good returns is mine. I bought my investment property on a 95% LVR in 2019 (pre-election). Accounting for all expenses and mortgage payments, the return on my equity (including stamp plus all other costs) has been around 80% p.a. (My LVR is now around 65%, mainly due to 45-50% price growth since when I bought it).
Is this going to be the experience for most property investors? Absolutely not. But, the majority of the wealth in this country has been built from property, and there’s a reason for that.
The problem with a 40-50% leveraged equity portfolio is that you can get margin called. If you use nab equity builder to avoid the margin call, your borrowing capacity will be limited by income and also your interest rate is higher.
Personally, I consider a 50% LVR on shares to be a similar risk profile as 95% LVR on a property. It really depends on your job security. I have a super secure job, so a 95% LVR on property is less risky because I can always just not sell, whereas if the stock market tanks I can still get margin called (unless you use nab EB, but then your borrowing capacity is severely limited).