Building better portfolios
Women investors earning more than men
Women are proving their place is in the home, with female investors making more profits than male counterparts. Analysis of Australian Taxation Office (ATO) figures has revealed women are proving more adept at investing in real estate over the long term, buying properties with better returns and long-term growth.
The proportion of women who own an investment property has also risen at a faster rate than men in recent years, despite women earning less than blokes on average.
Calla Property’s Susan Farquhar, who mentors men and women on getting into the market, said Aussie women were better investors because they took a keener interest in property and were more comfortable committing to a mortgage at a younger age. They were also better at saving for a deposit, more inclined to seek advice and less prone to risky investments, she said.
“Women tend to start when they’re below 35, often when they’re still single,” Ms Farquhar said.
“Much fewer men will invest when they’re single and they tend to wait till they’re older and in a secure relationship.”
Women’s keener focus may help explain changes in the gender balance of property ownership.
Roughly 13 per cent of women taxpayers owned an investment property in 2010 but in five years the figure rose to 15.2 per cent, according to ATO data. In the same period, the proportion of men with an investment property was fairly consistent, going from just under 15 per cent to 15.7 per cent.
Men were also more likely to rely on negative gearing, claiming an average $9904 per property in the 2014-15 financial year compared with $7253 for women. About 47 per cent of all investment properties are now owned by women.
This success in the property market mirrored results in other asset classes, such as shares.
A US study of eight million investors in 2016 by investment firm Fidelity found women outperformed
men by 0.4 per cent over the year. Investment tracking app Openfolio revealed a similar trend after evaluating 60,000 US investors, showing women’s returns performed better in the past three years.
Property Women mentoring group director Jo Vadillo said women often lacked confidence, which tended to be an advantage.
“They know they need to do research,” Ms Vadillo said. “They are not easily impressed with glossy sales speak or agents’ sharp suits and cars. They look at the house and the numbers, assess who the tenants will be and ... conduct due diligence.”
A lower appetite for risk was another key advantage for women, Ms Farquhar said.
“Men are more likely to gamble and take risks, so more will buy in ‘hot spots’ or mining towns,” she said.
“Women take a longer-term focus and want to minimise their risk. That’s vital for being successful ... because it’s a long-term thing.”
Investor Carla Barton, 31, has made hundreds of thousands of dollars from flipping houses in her spare time and said she attributed her success to a cautious approach.
“I’ll only buy homes 15km from the Sydney CBD because I know it’s very difficult to lose money there,” Ms Barton said.
She recently bought a unit in Dulwich Hill for $505,000, renovated it for $40,000, and sold for $640,000.
She’s now renovating a Leichhardt house for $1.2 million in a joint venture.
Investor Diana Lovasi, 34, is onto her third property deal, despite only starting investing just four years ago on a $55,000-a-year income.
“I feel like women have to start earlier,” Ms Lovasi said. “If you want to have children and take time off work to care for them you have to sort out your finances when you’re younger.”
Women know property. Australian tax figures show women are more talented than men at long-term real estate investing, buying properties with better returns and long-term value growth.
In part, this is down to better planning and greater experience gained over longer periods of time. Compared to many men, Calla Property’s Susan Farquhar points out, women aim to enter the property market earlier and with better vision.
“Women tend to start when they’re below 35, often when they’re still single,” Farquhar told The Saturday Telegraph. “Much fewer men will invest when they’re single and they tend to wait till they’re older and in a secure relationship.”
The female investment advantage is not limited to Australia. A 2016 study of 60,000 US investors found that women’s returns were consistently better.
Theories abound as to why this is so. Perhaps, suggests Property Women director Jo Vadillo, it might be due to the typically more rational approach taken by women.
Male readers attending auctions this weekend, might find it pays to consult the experts.
Talk to women.
Ms Barton’s Dulwich Hill unit, and (below) investor Diana Lovasi. Picture: Jonathan Ng
Clara Barton (right) made a profit with her renovation of this Dulwich Hill apartment. Main picture: Tim Pascoe