Dividend & Rental Income Approach for Investor

Dividend & Rental Income Approach for Investor

Food for thought for Priority Investor – Dividend and Rental Income  approach

After 2008 global turmoil, there has been a debate on earning from dividend yield stocks and earning from rental property (Residential and as well as commercial).  Both of them scored high on various parameters such as principal of an investment, cash flow benefits & risk profiling. It’s a superior vehicle for building wealth for the investor. Though the yardstick for analyzing dividend paying stocks and rental property asset may be different for our priority customer, but both of them certainly can match cash flow requirement and ability to provide the higher return in alternate asset class.

Analysing Dividend yield and Rental Income comparison

Parameter Dividend Yield Rental Income
Investment vehicle Blue Chip Stocks Generally Commercial  property
Liquidity High Low
Exit Barrier No Yes
Capital Appreciation Yes No
Legal & compliance Risk No Yes
Leverage on Collateral Yes, market accepted Yes, (banks)
Assured No Yes
Stability  of earning Low Higher
Capital Guarantee Low Medium
Biggest Risk Corporate Governance, one should diversify Legal Risk

Few through –

  • While rental property owners can usually steady rental income but they have to be very careful of managing it.
  • Dividend usually is free in the hands of investor
  • Stocks offer more diversification over rental asset.
  • Stocks score very high on liquidity

Yield Analysis

Company Asset Class Specification CMP Inflow Yield
Man Group Equity _ FTSE Stocks

0.88

0.1

11.87

AVIVA Equity _ FTSE Stocks

3.67

0.26

7.09

RSA Insurance Equity _ FTSE Stocks

1.32

0.09

7.01

ICAP Equity _ FTSE Stocks

3.26

0.23

6.93

Astrazenca Equity _ FTSE Stocks

30.53

1.82

5.95

NY upper Manhattan Real Estate _ Resi 175 sq. m.

3073000

11690

4.56%

London Price central Real Estate- Resi 175 sq. m.

4219250

11690

2.90%

 Conclusion

Generally, this form of investment is particular suites for High Networth Investor. In modern day, especially after the housing bubble, many investors have preferred dividend yield method. However, whether to invest in dividend stocks or rental properties depends upon one individual risk profile and expected return on investment (ROI), tax status & risk profiling of customer.

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4 Comments to Dividend & Rental Income Approach for Investor

  1. a says:

    You are so interesting! I do not think I’ve read anything like that before.

    So great to find another person with some unique thoughts
    on this subject. Really.. thanks for starting this
    up. This site is something that is needed on the internet, someone with some originality!

  2. […] This is prepared for one of my client & placing a small summary for my reader. However, one can link statistical figure on their own . Look forward for your  […]

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