A Comparative Analysis of the Performance of Real Property Investment and Shares in Botswana

Abstract

Purpose: The purpose of the study was to compare the performance of investments in real property to that of shares; and to provide investors just starting in Botswana with information on which forms of investment to pursue between the two. Research design/methodology/approach: The study adopted a statistical and descriptive research approach where a survey method was used to collect data. A sample of 10 institutional investors in real property and 10 institutional investors in shares were chosen from a population of 10 investors each. Purposive sampling technique which is a non-probability sampling technique was used to choose the respondents of the study and a structured questionnaire was used to collect both qualitative and quantitative. Quantitative data was processed using statistical measures of variability such as mean, variance and standard deviation while qualitative data was analysed using content analysis. Significance: The findings of the study are relevant in the sense that they have provided potential investors just starting with information on what characteristics makes real estate or shares a better form of investment in Gaborone, Botswana. Findings: The findings of the study revealed that property offered better returns than shares even though it was considered riskier under the period of study. In addition shares required less capital to invest in, they were more liquid than real estate and they offered better availability of change positions. Meanwhile it was evident that most investors in property were more comfortable with the characteristic that real property was reliable in terms of monthly paid rent compared to dividends paid to shares quarterly or yearly. However that being discovered, shares were highly recommended to investors just starting over real property because it had high liquidity, the investment is easily started, it requires less start-up capital, there is easy access to information as well as less entry, holding and exit fees compared to investment in property. Value: The study has revealed significant information on what would be the best form of investment between property and shares to investors just starting based on various characteristics.
Keywords: Property investment, Investment in shares, Investors starting, Risks, Returns.