House prices around the country are dropping, and depending on who you speak with, that means there are some potential bargains available on the real estate market.
While property investing is usually considered a young person’s game, is it possible for retirees to get involved?
Obviously, the later you leave it to start investing in property the less time you have to allow your assets to grow and the less flexibility you have to correct any mistakes you may make.
Property investment expert Michael Yardney from propertyupdate.com.au believes you are never too old to invest in property.
Investing in your 50s
“When you reach this age, it’s ideal if you have some property assets behind you, but if you’re just starting out then all is not lost,” Mr Yardney explains.
“Generally speaking, you should be able to obtain 25 to 30 year loans to fund your property portfolio, as most lenders are willing to accept that a person is able to work beyond the traditional ‘retirement age’ of 65.
“When starting to invest in your 50s, it’s essential that you have a very clear strategy with ‘growth’ at the top of your priority list. And you should consider ‘manufacturing’ this capital growth through renovations or development, if your risk tolerance, finance and experience allows for it.”
Investing in your 60s
“The reality of the situation is that starting your investment journey in your twilight years can be an uphill battle,” Mr Yardney says.
“Investing through your SMSF may be an option, though keep in mind that super fund rules and regulations around profits, investments and taxation can be complicated, and change frequently, so this requires advice from a suitably qualified financial planner.”
Investing as a retiree
“Interestingly, even if you are a retiree, it may be possible to borrow money for investment purposes – in the right circumstances,” Mr Yardney says.
“If you have demonstrable income, for example, from a sound property portfolio, the banks usually take this into account for your loan application.
“However, currently, the bank’s stricter serviceability criteria make it much, much harder to get a loan under these circumstances.”
Are you a property investor? At what age did you start? Would you recommend property investing to a friend?
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