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Have I left it too late to start investing in Property?

Almost everyone who contacts Adviseable who is ready to start investing, is already satisfied that property suits them as an asset class – they don’t need any convincing..

They’re either paying off their own home, invested in property previously or maybe even know someone that has done really well from property. The bottom line is that they know that to start investing in as soon as possible makes sense, but for various reasons there is still a hesitation in moving to the next level. One of the areas of indecision seems to be around timing. Over the years one of the most regular queries we get is ‘Have I left it too late to start investing?” and invariably the answer is a resounding. ‘No’.

During our lifetimes, most of us will work quite hard for 40 to 45 years. That’s a long time, so it makes sense that when we stop working we would want to have a lifestyle to make all of this work worthwhile

We all have different ideas about how we’d like to live when we stop working, but just being able to wake up when you feel like it, spend more time with the people you love, doing the things that matter to you and basically just getting your time back would be a good start.

To achieve this lifestyle you will need to build up an income stream that is independent of your own personal exertion. A residual income stream. It’s money that comes in without you having to work for it.

Like most people, you probably aim to eventually do this through superannuation, however there are a few issues you could face:
  • You will need to wait until retirement age before accessing this income stream
  • You might not be confident in the long term performance of your super assets
  • Longer age predictions mean that your super may not last long enough anyway
  • Frustration and uncertainty due to the constant changes in superannuation rules

If (like most people) you’re not confident that your superannuation (plus any pension that you may be eligible for) will sustain you for 25 years or so in retirement, then property investment can make a lot of sense. And it’s rarely too late to start investing.

Let’s look at this scenario:

Nick is 53 years old and wants to retire in 12 years. Nick realises that his superannuation would only last about 10 years after he stops working at 65. To secure his retirement, Nick has decided to start investing by buying at least 3 investment properties using his existing home equity for deposits.

The aim is that by the time his superannuation has started to dwindle when he’s 75, the investment properties will easily have a positively geared income and have grown in value significantly. This added income from the investment properties will start to replace the reduced earnings from Nick’s superannuation.

Alternatively Nick could sell an investment property and wipe out any residual debt he has on the other properties – he has options. Of course Nick needs to buy good investment properties to make this strategy work, which he will do with the help of his professional team.

The main point here is that Nick who seemed to start investing relatively late in his career, now has a more balanced portfolio and choices in retirement that wouldn’t be there if he hadn’t decided to invest

So, have you left it too late to start investing in property? Probably not.

As always, please get in touch with us on 1300 077 766 or email if you’d like to discuss this topic, or if we can help with anything else.

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