How to get into property when you’re 60-plus
Whether you’re looking to complete the great Australia dream or just be in your own real life version of Monopoly, it’s never too late to start investing in property. We’ve put together some useful information for seniors looking to enter the property market for the first time. It’s never too late to start, but there are several things every would-be real estate tycoon should be mindful of.
Be aware of limitations regarding your age
Age in and of itself cannot be the basis for a lender declining your loan application, but it may be part of the reason you’re knocked back. As an example, a 60-year-old may have some difficulty getting a 30-year mortgage approved, and they will be expected to provide sufficient proof of income to service the mortgage in the immediate future and for the duration of the loan.
It is also generally considered part of a mortgage broker’s due diligence to ask buyers in the 60s and 70s to provide information regarding their exit strategy for the investment. As Mortgage Choice Spokeswoman Jessica Darnbrough points out, “They’re going to make sure that you definitely have the capacity and the ability to make the mortgage repayments on a monthly basis.”
Manage your expectations regarding the investment
This may seem like a given, but it’s important to understand exactly what you expect to achieve out of your investment and really ask yourself whether you’re ready to cope with the financial obligations. Whether you’re looking for a place to rent out, a place to fix up and sell as a passion project or a place to live the onus is on you to crunch the numbers before you sign the dotted line.
Real Estate Institute of Australia CEO Amanda Lynch notes the range of options available for buyers looking for property late in life, “It’s never too late to buy a property as long as you plan for various stages and financial challenges in your life. We’ve heard of older people who are buying houses with their children and living in dual-occupancy houses, and they are also living with adult children who are carers, who are assisting with mortgage repayments. So there is room for a whole different range of living options which can make it financially viable to buy a house into your older age.”
Consult an independent financial advice professional
Ultimately, the most important thing you can do if you’re looking to invest in property at an advanced age is to consult an independent financial advice professional. Your investment is likely going to bring a lot of complex rules into play regarding superannuation and retirement income, and it certainly helps to defer to an expert when wading through these matters.
Just as no two snowflakes are the same, everybody is at a different place financially and your independent financial advice professionals will help you get your head around the limitations and opportunities of your specific circumstances. Investment in property generally requires significant lead time before you see a material beyond, but that doesn’t necessarily mean it’s beyond you.
In the end of the day age is just a number and if you’re in a strong financial positions and investing in property is an itch you can longer leave unscratched there’s no reason not to do it. What’s most important is that you’re aware of your limitations, manage your expectations and consult an independent financial advice professional before you finally sign that deposit cheque.
Related links:
What is a life-cycle super product? And do you need one?
How to calculate the bank balance you’ll need to retire
3 great ways to make money after you retire