Using your savings to invest in property during your 20s to 30s is a largely accepted and common place wealth strategy, but is it ever too late to start investing in property? If you are in your 40s or 50s with no investments and stressed about your financial future, there is no need to worry. Wealth creation through property has no hard age limit, especially considering the average person works into their mid-60s, and the minimum retirement age will only continue to rise.
There are many benefits in waiting to invest later on in life:
- You have an established network
- You will have more experience
- Better people skills
- Overall wisdom
- Higher superannuation funds to use for investments
Are There Risks with Investing in Property Later in Life?
Many have the mindset that it is too late or perceive it as overly risky to start investing later in life, despite securing a decent income or equity in their principal place of residence. To start investing you should firstly become educated and develop the right mindset.
Too Long to Reap the Benefits
It is true that property, like all other investment types, takes time to mature and for you to see a return. You may decide to “fix and flip” real estate, meaning completing repairs or upgrades on a property and trying to sell it for profit, but this may not be a viable option for you especially if you are still working full-time.
The more common choice is to hold the property relying on appreciation, counting on the fact that house prices increase over time. Residential real estate in Australia is historically strong, so positive gains are possible even if you start investing in your 50s.
Moreover, these investments and assets can be passed onto your children, and they will certainly appreciate the leg up!
The Economy and Market Conditions
Worried you’ve waited too long and are now priced out of the market? Never fear, whilst Sydney prices are certainly beyond the reach of many investors, there are other more affordable markets that are currently primed for significant growth. With the right research and advice, you can buy in high-growth, high-yield markets and maximise your time in the market.
Ways to Minimise Risk
Evidently, any form of investment strategy entails some level of risk and this is definitely the case for investors who are “late bloomers”, meaning they will have a shorter time period to grow their property portfolio and retirement funds.
Here are some risk minimisation strategies:
- Financial buffer – Organising some emergency funds to ensure the investor could cope with unforeseen maintenance or property vacancies.
- Being Smart with Tax – Utilising tax-effective methods to purchase properties.
- Insurance – Looking into income and life insurance as well as landlord insurance to protect their interests.
- Review and Plan – Making plans and holding open discussions on the property investments, almost like operating a business, and ensuring the regular review of the portfolio with a property investment advisory such as inSynergy.
Once armed with adequate research and education, you can start building your portfolio by looking into investment-grade real estate.
Never Too Late to Invest in Property with inSynergy
Investing involves maximising returns by using your income-producing years to hold investments over the long term. So, with at least 10 to 15 years of working life still in front of most 50-year-olds, property is still a worthy investment to think about.
With all the risks and different factors to consider, getting professional property investment advice would be in your best interest and would minimise any stress. inSynergy are a property investment advisory and can help you with long term wealth advisory and strategies. Find out more about inSynergy’s range of investment services and book a time for your complimentary 60-minute consultation.