4 reasons why women make great property investors

I want to see more women invest in property. It’s common knowledge that we are not as well prepared for retirement as men and astute property investment can do a hell of a lot to redress that imbalance. The good news is that there is growing evidence showing that the fairer sex actually make excellent investors.

In Australia, women are behind the 8-ball. We are paid significantly less than men and have half the superannuation fund balance at retirement. We often take years out of our careers to have and rear children and this creates a financial gap between the sexes that widens as each decade passes. Of course, it’s harder to invest when you have less money to spend, and so consequently, fewer women invest in property than men. But is that the only reason?

There has been a lot of talk in recent times about “the confidence gap” in relation to women and careers. I have seen this same concept play out in the property market. This is apparent with both single women and those in relationships (though it manifests differently). It seems that there is a big difference in the way that men and women approach major decisions and its confidence, rather than knowledge or expertise, that often results in action.

Some years back Hewlett-Packard conducted a study where they looked into how their people applied for internal promotions. They found that women only applied when they met 100% of the criteria, whereas men would put their hand up when they only met 60%. This has been attributed by many to a lack of self-confidence on the part of female staff. One article I read suggested it might have been due to women being more inclined than men to follow what they perceived to be the rules of the hiring process (and not having an “old school tie” to trade on).

Whether you subscribe to either of these theories, it has been my experience that many women take the same approach when it comes to investing, particularly in property. If they don’t know everything they feel they need to know, they won’t do it. Or if they feel they need to break “rules” in order to invest, they are less inclined. But paradoxically, both concepts leads to the first reason why I think women make great property decisions.

Before making a major decision, women like to do their homework. In particular, I think this is a lovely aspect to the confidence gap. By accepting that we don’t have all the answers, we do our research. So when we do come to a decision, we feel more equipped to make it. Ergo, by being more considered, when women invest in property, that decision has a better chance of being a sound one and we can dodge avoidable mistakes. The difficulty comes when deciding how much information is enough. 

Women are more likely to ask for help! Ever been in a car with a male driver who is lost? They are usually not overly keen on pulling over and asking for directions. Women, on the other hand, are much more likely to take guidance. When women invest in property, we will seek out expertise and canvas the experience of others whose opinions we respect.

Sometimes it’s this very willingness to ask for advice that results in women being dismissed by men (and sometimes other women) who say we are more emotional about property buying and therefore need the most help. I certainly don’t agree that women need more assistance than men, in fact, you could argue that men need it more precisely because they don’t think they need it!!!

Of course, seeking out a sounding board can lead to problems. Asking too many people will probably muddy the waters and sometimes partners can be more hindrance than help.

Women aren’t scared of long term commitment. Property investment is a long game. The large amount of capital required, coupled with high acquisition and divestment costs, means that short-term trades are unlikely to produce solid gains. There have been numerous studies (some in the wake of the GFC) that have shown that, over set time periods, women share market investors perform better than men. This is put down to a number of factors, one of which is that we are less likely to panic in the face of changing market conditions. Because we do the research upfront, we are less likely to second guess our initial decisions and are therefore less reactionary in the face of market fluctuations. Applying this principle, when women invest in property we are more inclined to “set and forget” and let the power of compounding work its magic.

When it comes to property, emotion isn’t a dirty word. I have come across some pretty patronising articles written on the subject of women and investment and, disappointingly, some of these have actually been written by women. There seems to be a common assumption that our emotions lead us to make unwise investment choices, however, I don’t think that this is necessarily a disadvantage.

Property investors are exhorted to “take emotion out of it” and “buy with a calculator”. Buying “investment grade” property is meant to be the smart thing to do. However, robots don’t live in houses and apartments, people do. So it stands to reason that if you buy a property that is more appealing to a wide range of people, you are going to have shorter vacancies, higher rents, and in the longer term, more buyer competition and greater capital growth. When women invest in property we have the opportunity to harness the power of emotion.

Now, this blog is not about saying women are better than men, it’s about letting women know that there are some very valid reasons why we should have more confidence about making investment decisions. Our natural inclinations are aligned with making wise, long-term property investments and sticking to them. And asking for assistance with such a large, potentially risky purchase isn’t a sign of weakness, it’s smart!

From a man’s perspective read what my co-host on Location Location Location Australia, Bryce Holdaway has to say about this as well.

Further reading:

Capital growth or yield? Which will make you rich?

9 Reasons You Should Avoid Buying A Property

What to compromise on when buying a house or apartment

Published:-  1 June 2016

DISCLAIMER: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.

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