What do you think of this property calculator?

Property Calculator | Nucleus Wealth

It's a new one from this wealth fund, trying to compare property investing to shares growth. Any thoughts?

As an aside I looked into their Nucleus wealth product.
You can pretty much recreate their product yourself on the ASX and by buying bonds.
I don't really see the point of their product.
They do provide a fancy interface UX for millennials.... that's about it.

I was a fan of their MB blog for a while but they are so anti-China it gets on my nerves. I'm not Pro China in any way but no country is all bad. That's what you would think by reading their blog....

 

Haha this "property calculator" is developed by a fund, any values you use will lead to the conclusion that shares are a better investment i.e. it only shows you a small piece of the picture and that picture is biased towards shares.

The principal was on Martin Norths channel and his analysis was that property is only good if you have no mortgage, leverage is the entire point of property investment!!!

Anyway my views are very simple, the calculator above is a load of rubbish, if you have $100k you should be looking at property, especially of you are young.

 

I assumed as much. Thanks Croseks. I am 45 so not young. I have 60,000-80,000 dollars. So I am considering what to do.

What parts of the puzzle is he missing?

 

Firstly and most importantly, don't make any decisions by listening to me haha, I am just some guy on the internet.

Let's take an example.
Say you invest $60k cash into a well managed fund returning 10%p.a. net (this is being very generous)
After 15 years, your fund would be worth around $250k, not bad right?

So now let's take the same amount of $60k and use that as a deposit to get yourself a loan of $600k to purchase property.
Let's assume you bought your neighbours house without doing any research and the average return is 4%p.a. net.
After 15 years, your investment property is now worth $1M, however you still have a mortgage of $540k because you kept of refinancing your IO loan.

After you pay back the loan to the bank, you have around $460k left over.

That's leverage. You invested the same amount in the beggining but the result is very different, even with a much lower return per annum!

So you're asking why dont I just get a mortgage and buy shares instead? Short answer it is more complicated and restrictive then getting a mortgage for real estate.

 

A 60k deposit for a 600k loan? On a salary of 60 grand a year, I will be on track for a loan of around 230k, maybe more but have been advised not to. 60k is all my savings.
I don't think it's possible to borrow 600, 000 dollars on a wage like mine.

 

10% deposit + LMI.

If you buy an investment property, a portion of the rent can be used for servicing that loan.

I was just trying to point out why I would invest in property vs shares with that amount of money

 

Appreciated.