This question is often asked. Invest in share market or real estate property.
Some answer is share, some said property.
We used the statistic data for comparison.
Scenario 1: Buy a completed house at price RM 400,000. pay 10% for down payment, the rest borrow from bank with 4.2% interest rate. The house is rent out with 3% rental rate. 5 years later sell the house, how much the investor gain.
Based on Malaysia Housing Price Index, the house price rise between 2 to 12%. The mean of 10 years is 5.6%.
After 5 years the house price rose to $561,000, sell it and reduced outstanding bank loan, thus simple gross profit included rental is $263,460. and net profit after deduct down payment and installment is $106,096. Does this profit return excited you?
Now, we compare what if invest in share market.
Above is past 5 years KLCI performance chart, assume same scenario with initial investment $40,000 and yearly saving $23,473 to investment, plus dividend yield of 3%.
After 5 year, the investment portfolio is appreciated to $310,891 and the net profit is $153,527. Amazing!
From the figure above shows invest in share market is better than property. Bear in mind, there is some risk in investment either share or property.