Your retirement plan. Exciting or not so exciting? Definitely telling! And if you are not feeling excited and have 10 years up your sleeve, even 5, property investing can change things up for you in a big way.
Don’t be the person or couple that leaves it to three months before retirement and seeks help out of desperation. There’s not a lot that can be done when you are this close to retirement. Do something whilst you have a reliable income stream.
If you are 10 years away from retirement, I encourage you to put together a plan. Build your plan based around the following questions:
- How old will you be when you retire?
- How many years living, in retirement can you expect to have?
- What does retirement mean to you? E.g. More time with a loved one, Time for Holidays, Time for a part-time business you’ve always wanted to do?
- What type of lifestyle would you like to have?
- Where do you want to live?
- What factors should you build into the plan, e.g. healthcare, inflation, superannuation, living expenses, etc?
- Will your expenses change?
- Do you have any big plans, e.g. world trip, caravan, a trip to space, etc?
- How much income do you need each year in your retirement?
- Multiply this by the number of years of living expected.
- What is your current income, assets and debt?
See your accountant or financial planner. Keep in mind that if you are interested in property investing, it’s best to work with experts who have personally invested in property. They not only know the theory, but they have lived it. Also look for others to create your property team: mentor/coach, buyer’s agent, mortgage broker. The collective group will keep you both informed and motivated. Make sure you work with people you trust.
If my retirement was 10 years out, I would be buying as many properties as possible to grow my asset base aggressively (whilst building in the necessary buffers). And here’s why
- You are a more attractive lender while you are employed and receiving payslips.
- You are likely to have the back-up of work income if the investment has some short-term difficulty. (better to get the purchasing started asap) – while the job income is strong, and you have that safety net in place.
- It is a lot harder for self-employed people to get loans, especially in the current state of lending.
- Look to play the long-term game, focus on the 10 years, rather than looking for instant success – be patient
- Possible tax advantages to selling a property when other income isn’t being derived, e.g. potential for less Capital Gains Tax to be paid.