Nearly half of all investment properties in Australia are now owned by women but how women approach investing seems to be somewhat different from men.
Financial institutions and academics in the U.S who have studied the respective investing habits of men and women in the stock market report that “men and women invest differently” and that gender can affect financial decisions.
But they say this doesn’t mean that we can’t learn from each other. In fact, understanding the different approaches each gender takes to investing in property can help you to pinpoint weak areas and look at ways you can improve.
The risk factor
Getting involved in property investment can be risky but studies have shown that men have a much higher appetite for this risk than women. This may see them more willing to invest in ‘hotspots’ such as mining towns.
At the other end of the scale, women tend to take the time to do their due diligence and look consider the ways they can minimise their risk.
Women who are single are also more determined about taking control of their own financial security.
Furthermore, women typically start investing while still single and under the age of 35, whereas men tend to wait until they are older and in a secure relationship.
Takeaway tip: would-be investors need to mitigate risk by doing their due diligence and ‘crunching the numbers’ before diving into purchasing an investment property.
Don’t let being single stop you from investing in property.
The financial factor
In general, women tend to start investing in property at a younger age than men, despite earning less. According to the Workplace Gender Equality Agency, full-time female workers earn 83c for every dollar earned by their male counterparts.
But men are still a lot more financially literate than women, especially when it comes to using credit cards and keeping spending under control.
Industry experts have suggested that there needs to be a shift towards getting the financial literacy of young women higher.
Women may start investing earlier in general but it can be your family circumstances that allow you to do so, no matter what your gender.
Parents that are investors themselves and who help their kids out with a deposit to get on the property ladder can also be a big influence.
Takeaway tip: be disciplined with your savings and practice good money habits from a young age. Is the ‘Bank of Mum and Dad’ an option?
The profit factor
When it comes to property investing, the goals of each gender can be quite different. Women are typically more interested in long term commitment, family security and retirement, while men tend to have a higher turnover of their property portfolio and chase immediate returns.
As well as chasing returns, immediate tax benefits are also a bigger area of interest for men. According to the ATO, men claim more money through negative gearing than women do.
In saying that, women are making more profit from home ownership than men over the long term, buying properties with better returns and long term growth according to Australian Taxation Office (ATO) figures.
Takeaway tip: look at property as a long-term investment to build wealth rather than trying to outsmart the market. Research negative gearing and whether this strategy is right for you.
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