Although rental income provides a stable return, this class has a moderate to high overall risk as property values can rise and fall. It can also take some time to sell property investments, which mean that property investments are better served to long-term investors. If you have an investment property then you ll be assured of reasonably regular rental income, provided the place is fully tenanted. There is always the risk that you have expenses on your investment property, which you have to meet from your own sources if the property is not leased or rented out. The main things that people look for in property is the capital growth and the use of techniques such as negative gearing to increase the capital growth without any further cash input on your part.
Many people go into real estate investment because of the ability to negatively gear.
Negative gearing simply means mortgaging your property and using the capital to buy additional investments and because of the safety of real estate borrowing facilities, this is generally not a problem. Shares Shares are also sometimes called equities. When you buy a share you purchase a part of the ownership of the company. The return from shares is similar to property in that it is a combination of dividends and changes in the share price. Dividends are a share of the profits of the company.