Property Fund/Trust vs. DIY…

Just wondering, if we step back a bit, we need to compare the risk and return against the reward for any invesment consideration.

It strikes me as strange that most of us mere mortals should put so much effort (a.k.a. time and money) into learning about the property game, and then stressing about, for example, trying to get a CF+ or CFneutral deal going, when we know that we can collect a capital guaranteed AND guaranteed 6% return by simply placing our money into something like an ING Savings Maximiser account (i.e. small CF- return).

We can go one step further, and put it into something like this:
http://www.2020directinvest.com.au/investment_CurrentOffer_323338.cfm (Real Estate Capital Partners Hi Q Fund, with projected 10%+ net returns + potential for capital growth). This example is still property investing, just not pushing against the stream as a newby/novice. And it is simple. Ok, so if the returns are not as high as projected, they may be half that … but is DIY CF+ property investing to gross 8-10% at best any actual improvement? Yes, there may be more upside, but are we seriously suggesting that there is so much extra upside to compensate for the extra time, effort and risk? If it’s possible to get a 10% return and capital growth potential in a simple, listed property trust, surely you’d have to be looking at a 20% return and/or extremely good capital growth opportunity to make the DIY deal look attractive, all other things being equal. And how many deals that look THAT good off the bat are around?

And I won’t even get started on the other types of sector funds that have achieved massive returns recently (during the same time, more or less, as the last property boom – don’t you think there has to be a link somewhere between the booming Australian share market, the WA resources boom, and the Perth RE market boom!!!???)

Then factor in the stress and size/committment of a DIY property investment. Why not, alternatively, get a margin lending account set up for $10-$20k, and have a dip in a quality property trust?

That’ll do – I’m just wondering if direct property investing all by yourself is worth it, compared to all the simpler investment trust alternatives? We should be looking at the big picture, and wondering if really, we are taking the right approach, before we get wound up into the details of all the usual topics that form the bulk of the daily discussions in this forum.

Perhaps we need to raise the cutoff accept/reject threshold of our CF+ deal analysis (say, to a 15 or 20% gross return), before we seriously consider that we are going to be better off finding a sweet DIY deal compared with, say, the simple everyday property trust?

Would welcome return comments.