Are you too old to invest in property?

House prices are dropping around Australia so can retirees capitalise on the situation?

Are you too old to invest in property?

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?

Are you eligible for an Age Pension? Do you know your rights? The PensionChecker™ tool has all the information you need.

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    Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.





    COMMENTS

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    double j
    26th Mar 2019
    10:09am
    Property investment has been very good to us, we have purchased domestic , rural and commercial properties , the best has been commercial with good tenants and a 5x 5 x5 lease and the only outgoing on commercial is land tax, the rest is the tenants responsibility. We do not have any superannuation, the commercial property is our super , it owned by a Pty Ltd company which we are the only share holders and only directors and we have total control over our investment The only pain in the butt is doing a BAS every quarter. It is our intention to own it long enough to be exempt from capital gains tax .
    Nose Hair Bob
    26th Mar 2019
    10:52am
    double j, you may have a good understanding of capital gains tax. I bought a property with a friend under joint tenancy or whoever survives longest inherits the title outright which happened in my case 2 years ago. It is and has been my permanent place of residency for all 15 years, although I rent it out from time to time as a shared accommodation. What effects does capital gains tax have on my place if I sell or current tax law?. Thanks if you know any thing about this.
    Curious
    26th Mar 2019
    2:47pm
    Investing in property at a mature age is not for the faint-hearted. Many issues need to be considered. The whole purpose of the property investment is to give you a reasonable income stream for your trouble and at the end of the investment you are rewarded with a decent capital gain.

    To achieve this purpose, one has to consider the location of the proposed property investment, the type of property, the size of the property, existing property or new development and the size of the complex. Having decided this logistic, the next decision is on what is affordable, the size of one's deposit, the value of the stamp, duty, legal fees, settlement adjustments including council rate, water rate and land tax (new development}, and finally the required size of the loan from a financial institution. Then you have to seek the right mortgage loan from a bank with a competitive interest rate and a term package.

    On the assumption that all the processes mentioned above have been carried out smoothly, one has to consider who is now going to manage this investment property and to collect the rent and perform the repairs and maintenance when required. Depending the type of property, the administration and records of income and expenditure for the tax purposes can be a nightmare.

    I have employed an real estate agent and an accountant to look after my properties for tax purposes. I have been doing this since I was in my twenties. After over fifty years, I still need to oversight everything without infringement of rules and regulations. It can be exhausting. Strata management and building management of an investment property are certainly for the faint-hearted. If anyone thinks investing in property is an easy street, please think again.
    double j
    26th Mar 2019
    5:26pm
    Nose Hair Bob I have no experience in joint tenancy in domestic property however I did share a rural property with my brother (both our names on the title )and when we subdivided it we got a special ruling from the then government that avoided any stamp duty because the subdivision was not changing the ownership Therefore I suggest you think outside the square and you will find a way Good luck
    Nose Hair Bob
    29th Mar 2019
    4:04pm
    Thanks double j, think I'll get professional advice as I don't want any nasty surprises down the track.
    Franky
    29th Mar 2019
    12:02pm
    I have done well out of property investments. However as I got older and not being a handyman I found it bothersome and costly to be a landlord. I now just own my own home and invest passively as I don't like the headaches and anxiety that comes with looking after property. I also believe the time for big price rises is over, unless you are able to invest in Asia.