Investing for Retirement in Australia: Is It Ever Too Late to Invest in Property?

We’ve all heard the saying ‘better late than never’. But does this sentiment apply to investing in property? If you find yourself getting closer to retirement without any property investments and are feeling concerned about your financial future, rest assured. The potential for wealth creation through property is not reserved for younger people.

Benefits of investing in property later in life

Accumulated equity in your own home

If you have built up a good amount of equity in your own home, it may be possible to use this as a bargaining chip when accessing finance. Using existing equity as a deposit for an investment property can help boost your borrowing power and lower your loan to value ratio (LVR), which can allow you to access cheaper finance products. 

Accumulated wealth through superannuation

For those who have met a condition of release for superannuation, they are able to consider using their super to help fund a property purchase. It’s important to seek financial advice in this regard to determine if this is the best use of retirement funds. 

Another way of using super to purchase property is through a self-managed super fund (SMSF). It is possible for an SMSF to purchase an investment property if it meets the objectives of the fund. 

Leave a legacy for your children

Investment properties may be used as a tangible asset to leave as a legacy for your children. While investment properties may be a valuable legacy, it's important to consider the individual needs and preferences of your beneficiaries. Open communication and involving them in discussions about the properties can help ensure that your legacy aligns with their goals and values. Additionally, consulting with legal and financial professionals can aid in creating a comprehensive estate plan that addresses tax implications and other considerations.

Are there risks associated with investing in property later in life?

There are risks associated with investments at any and all stages of life. It’s important to weigh up the risks and benefits that are relevant to your unique circumstances before deciding how to proceed. 

Here are some particular risks that may be relevant to someone looking to invest later in life: 

Liquidity concerns

Real estate is typically considered a less liquid asset compared to stocks or bonds. Selling a property can take time, and in times of financial need, converting property into cash may not be as quick and straightforward.

However, if the property is a cash flow positive investment, it may be possible to generate enough income through rental returns, depending on your liquidity needs. NDIS properties through Apollo Investment are set up as cash flow positive investments. 

Maintenance and upkeep

Property ownership comes with ongoing maintenance costs. As one ages, managing and maintaining a property can become physically challenging, especially if unexpected repairs arise.

With NDIS property investments, a specialist property manager is often involved. This can help alleviate any responsibility of personally maintaining a property. 

Financing challenges

Obtaining finance for a property investment may become more difficult as you age. Lenders may be hesitant to extend long-term loans to individuals nearing retirement, due to serviceability concerns. However, it may be simple for you to overcome financing challenges if you’ve built up equity in your home loan, have a superannuation fund you can tap into or have saved a significant amount over the years. 

Prior to venturing into real estate investments during your later years, it is a good idea to seek guidance from financial experts, evaluate your specific financial circumstances, and weigh up the risks against anticipated benefits. 

If you’d like to explore the idea of investing in NDIS property and discover whether the projected positive cash flow suits your financial needs, please get in contact with us today.