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Gold vs Property Investment

gold vs property investment

For years, gold hasn’t only been a symbol of wealth and stability but has been something that investors have turned to for portfolio diversification and risk-free investment. But is gold really a wise investment choice these days, and how does it compare to property investment?

That’s what we’re going to look at today. Below, you’ll find everything you need to know about gold investment vs property investment. We’ll discuss the pros and cons of each and look at which is the best option for the next step in your investment journey.

Investing in Gold

Pros & Cons of Investing in Gold

Let’s take a look at the pros and cons of investing in gold first of all. From liquidity to income generation, we’ll cover all the bases so you’re able to make an informed decision on whether gold investment is right for you.

What Are the Benefits of Investing in Gold?


Gold is a highly liquid asset, which means it can be bought and sold in various forms, including bullion, coins, and exchange traded funds (EFTs). This liquidity provides you with the flexibility to enter and exit gold investments quickly, minimising your transaction costs in the process.

Inflation Hedge

Historically, gold has always managed to maintain its value over time, which makes it an effective inflation hedge. Put simply, this means that during times of inflation, the purchasing power of fiat currencies tends to decline, but the value of gold rises, preserving your wealth.

Portfolio Diversification

Gold also has a low correlation with other asset classes, such as stocks and bonds. As such, adding gold to a diversified investment portfolio can reduce overall portfolio risk and enhance your long term investment returns by offsetting losses during market downturns.

Safe Haven Asset

During times of market uncertainty and geopolitical uncertainty, gold is often viewed as a safe haven asset. This basically means that when financial markets are volatile or geopolitical tensions escalate, investors tend to turn to gold as a store of value, which, in turn, drives its price up.

Global Economy Acceptance

Another benefit gold brings to the table is its recognition and acceptance as a form of currency and store of value all over the globe. This also makes it one of the most attractive investment options for international diversification and protection against currency devaluation.

Tangible Assets

Unlike stocks, bonds, or digital assets, gold is a tangible asset. This means that you can physically hold gold and store it, which provides a sense of security and ownership many investors find appealing.

Capital Appreciation

While gold doesn’t generate income in the same way as dividend-paying stocks or interest-bearing bonds, it has the potential for capital appreciation over the long term. This is due to the demand for gold in jewellery, industrial use, and investment demand.

What Are the Disadvantages of Investing in Gold?

No Income Generation

Unlike commercial property investment, gold does not generate any income. Instead, its value relies solely on price appreciation, which can limit its appeal if you’re looking for regular income from an investment.


Gold prices can also be highly volatile and can experience significant fluctuations in short periods. This can lead to unpredictable investment returns, making it a bad choice for investors with a lower risk tolerance.

Storage and Insurance Costs

Physical gold holdings require storage, which can incur additional costs such as renting a safe deposit box or purchasing a secure safe. Similarly, you’ll need to insure the gold against theft or damage, which, again, adds to the overall expense of ownership.

Lack of Intrinsic Value

While gold has been historically valued for its scarcity and aesthetic appeal, it doesn’t have any intrinsic value beyond industrial applications and perceived worth. Its value is primarily driven by market sentiment and demand, which can be influenced by several factors, including economic conditions and geopolitical events.

Pros & Cons of Investing in Commercial Property

As you can see, investing in gold comes with some good benefits but also has plenty of drawbacks. But what about investing in commercial property? Let’s take a look.

What Are the Benefits of Investing in Commercial Property?

Stable Income

Commercial properties, such as office buildings, retail centres, and industrial warehouses, are capable of generating stable and predictable rental income. You’re also able to grow this income over time through long-term lease agreements with built-in rent escalations.

Tax Benefits

Another advantage of investing in commercial property compared to gold is that you can unlock several tax benefits, including depreciation deductions, mortgage interest deductions, and the ability to defer capital gains tax through like-kind exchanges.

Long Term Appreciation

Commercial real estate investments have typically demonstrated long-term appreciation potential, too, and while short-term market fluctuations may occur, well-located and well-managed commercial properties have the potential to appreciate in value over time. This, in turn, provides you with capital appreciation alongside steady rental income.

Value-Add Opportunities

You’re also able to enhance the value of a commercial property through certain strategies, such as renovation or redevelopment. This gives you the potential to increase occupancy rates or renegotiate lease terms, increasing your chances of being able to generate substantial returns.

Inflation Hedge

The value of commercial property, as well as the rental income it generates, tends to increase in line with inflation, which makes investing in commercial property an effective hedge against inflation.

Tangible Asset

Just like gold, commercial property is also a tangible investment that you can physically see and touch. The difference, however, is that commercial real estate investments can be improved over time to add even more value and generate more income.

What Are the Disadvantages of Investing in Commercial Property?

Higher Initial Investment

One of the biggest disadvantages of commercial property investment is that it requires a significant upfront payment compared to some other investment options. You’ll need to think not only about the purchase price of the property but also about property taxes, insurance, maintenance costs, and improvement expenses, all of which can add up to a substantial sum of money.

Vacancy Risk

While commercial properties are capable of generating rental income, there is also a vacancy risk between tenants, which can disrupt cash flow. This is especially true for prolonged vacancy periods, which can significantly impact your returns.

Tenant Risk

Likewise, the financial stability and creditworthiness of tenants can affect rental income and the general performance of property investment. For example, a default by a major tenant can lead to a huge amount of rental income loss and, in turn, increase the risk of financial instability.

Management Complexity

Managing commercial property also requires active involvement in leasing, maintenance, tenant relations, and finances. This is a pretty specialised field, so you’ll likely have to hire a property management company, which will come with costs.

Whether you feel shares or property is the right choice for your investment journey, we’re here to help. Contact us today to book a no-obligation 15-minute call, and we’ll answer any questions you have, talk you through your options, and look at which is best to help you grow your wealth portfolio.

Is it Better to Invest in Gold or Commercial Property?

Invest in Gold or Commercial Property

Both gold and commercial property offer unique advantages and disadvantages that may appeal to different people, but deciding which to invest in ultimately depends on your own investment goals, risk tolerance, and personal preferences.

For example, investing in gold can provide portfolio diversification, protection against inflation, and potential capital appreciation. However, gold doesn’t generate any income and can be pretty volatile, with its value driven by market sentiment and demand.

On the other hand, commercial property offers a stable stream of rental income, several tax advantages, and almost guaranteed capital appreciation. You do, however, need a larger initial upfront investment and are likely to incur costs through property management.

Need Help With Your Commercial Property? Book a Free Call with an Experienced Commercial Buyer Agent

Are you interested in investing in commercial property? Contact Revolve Commercial today and speak with one of our experienced Buyer Agents, who will listen to your goals, walk you through your options, and start you on the path to your commercial property investment journey.