A high number of retirees and soon-to-be retirees are amongst investors who made a mark on the Australian property market in 2013, with activity at its highest levels in December since late 2003 in regards to a proportion of all housing finance commitments, according to RP data released earlier this year.
Members Alliance CEO David Domingo says silver-hair investors are changing the face of the investment market by re-entering with ambitions of returns that other ‘asset classes’ can’t provide.
“The timeline of achievement has shortened with each generation; our parent’s generation had a goal to pay off their homes before retirement, but now baby boomers are chasing full ownership of a $1 million house whilst also wanting to refinance to leverage their equity long before retirement,”
“These days more people are realising they have ‘dead’ equity in their homes, which explains the spike in activity from silver-hair investors.
“Well located and rentable homes are at the top of the over-55s investment wish list, but purchasing means and goals can and do vary.”
These investors are using their age to their advantage, with some investing with funds from their self-managed super fund.
The real estate industry has changed immensely since baby boomers bought their family homes, which is why most experts agree older investors should buy with clear objectives to avoid financial pitfalls, and as importantly seek reputable advice before buying.
Mr Domingo encourages retirees to think long-term with their investments by focusing on a clear mandate.
“This includes suburbs close to railway stations with established and ongoing demand and consistent population growth trends rather than properties promising super high yields today but questionable long-term rental demand tomorrow,” says Mr Domingo.
“It’s a question that all investors should ask, but especially the over-55s: Am I buying for a premium rental yield with higher risk or a long-term capital gain and a reasonable rental income?
“Reaching out for advice from finance and property experts can also help investors steer clear from other common mistakes like retiree investors only buying homes they would live in and most unfortunately ignoring what tenants expect.”
Tenant’s expectations have changed to renting property that is smaller in size, low maintenance and near amenities and public transport.
Mr Domingo says in some cases, silver-hair investors are unaware of what a good investment property looks like today.
“It’s been so long since they went out looking for their own homes and most critically they are least versed in the proper mandate and criteria,” says Mr Domingo.
Members Alliance is a privately owned financial conglomerate, specialising in financial planning and financial services, providing clients with proven strategies and techniques to ensure a financially secure future.
For more information visit www.membersalliance.com.au. For all media requirements contact Bruce Nelson on 0423 403 449.
Zakazukha Marketing Communications
3 Eden Court
Nerang, Queensland 4220
+61 7 5596 6634