Can millennials invest in property?
Despite all the bluster about eating too many avocados and taking too many holidays, millennials (or Generation Y) can definitely get a leg up by investing in property at a young age. By getting your savings and strategies in place early, you can set yourself up to buy property earlier. Once your cash flow increases from advancing in your career or through your business if you’re self-employed, you can portion off more towards an investment property deposit.
The older generation: Gen X and property
Generation X (born between mid-1960 and early 1980s) are at the prime time for investing in property – according to the statistics, it’s this cohort that owns the most investment properties! The earlier you invest, the better. If you buy four properties in your 40s valued at about $400,000 you will have a $1.2 million portfolio. They could triple in value by the time you reach retirement age.
Baby Boomers – harder to invest?
Baby Boomers own over half of the investment properties in Australia, so getting into property at this age is far from impossible. Banks may still lend a traditional 25-30 year mortgage, if you are prepared to work beyond your retirement age (65.) It would be wise to invest more into improving your property – with subdivisions, renovations or further development so you can gain more value earlier on.
Beyond the Baby Boom – too late? Or no such thing?
If you are at retirement age, or approaching it, investing in property directly can prove difficult. Banks are reluctant to lend to people no longer working and/or have no assets to leverage in the loan.
However, one workaround is to invest in property via your Self-Managed Super Fund (SMSF.) This is also a legal and financial nightmare for the layperson, so you will need a seasoned financial professional to navigate negative gearing, capital gains tax, trusts and compliance with ever-changing regulation. If there’s anything to be gained, it’s never too late to invest!