Build­ing bet­ter port­fo­lios

Women in­vestors earn­ing more than men

The Daily Telegraph (Sydney) - - The Everest - AI­DAN DEVINE

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.

Clara Bar­ton (right) made a profit with her ren­o­va­tion of this Dul­wich Hill apart­ment. Main pic­ture: Tim Pas­coe

Ms Bar­ton’s Dul­wich Hill unit, and (below) in­vestor Diana Lo­vasi. Pic­ture: Jonathan Ng

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