property investment am I too old?

Hi all .. my husband and I are 50 this year and are considering enlisting the services of a property investment group who is suggesting using our super to purchase some property in order to secure a comfortable retirement. I am worried about increasing our debt as we have almost paid off our home but we need to find a way to boost our super. Are we too old to be increasing our debt at this stage? We are both working and have good income and we also want to be able to assist our children in purchasing their properties in time, but again, we would have to increase our debt if we go guarantor. Any advise would be appreciated.

 

Hi
50 isn't too late, you still have another property cycle until you retire.
However, I'd be careful about getting involved with particular groups who could be pushing particular properties or products. There is nothing wrong going to seminars and getting ideas but before you make a decision go to a forum such as this and discuss it.

Regarding property through a self managed super fund, you'll need a considerable deposit. In my case I needed 28% of the value of the property plus stamp duty plus buying expenses. I've only bought 1 property so far and I want to buy 1 more. The yearly SMSF accounting costs will be between $1K and $2K

Regarding kids, I'll be in a similar situation soon but I haven't given it much thought. I don't want to risk our assets so I probably wouldn't go guarantor for them.
I'd rather offer to sell them one of my existing IP's at a discount or to give them some cash or they can take over the loan of 1 property each and it can be theirs after I pass away.

 

Hi there

50 isn't too late!- after all, there's probably another 15 working years left (depending on your personal retirement plans). Talk to your accountant about your plans, especially before you go investing with one of these middlemen groups (who often don't provide objective advice about what to buy but point you in the direction of developers from whom they're receiving a fee). You can buy any residential property for your SMSF- we've had a few clients do this now and we've bought them established properties that they've been very happy with. Do a little more research before you embark on this path- it may well not be the right course of action, depending on your future retirement plans. Best of luck.

 

Thank you I appreciate your feedback. I am meeting again with this property investment group tomorrow night where they will look at our finances in detail and so far they are suggesting a house interstate. Is there a shortlist of reputable investment groups. I have been researching on the internet and have only heard good things about this particular group so far.

 

To me this sound sound alarm bells but anyway, come back and let us know what type of property they're suggesting, the purchase price and the suburb and we can look at past performance and growth predictions.

Don't worry none knows you here and you don't have to give out the property address.

 

We already (almost) own our own home in Sydney and have an investment property (not much growth so far) in the central coast so maybe this is why they are thinking interstate (Brisbane suburb near water) - land tax issue? What do you think?

 

Central coast hasn't had a lot of growth this year which is ok for me because too much growth has the potential for a price correction.

Land tax is 1 of my concerns as well. However, the SMSF is a separate entity so it has its own land tax threshold.
As for Brisbane, it hasn't had much growth this year so you're starting at a reasonable level. Just be careful where you buy so that you don't end up in an oversupplied market.

Are these guys you are seeing going to find you a property or they are just giving advice?

 

Greatly appreciate your feedback .. They will find a property withing ??km cbd radius and water. They negotiate purchase price, find tenant, etc etc.

 

Securing a comfortable retirement has nothing to do with investing in property.

It has everything to do with simple financial law - spend less than you earn in your working years so that you can spend it in your years of retirement.

Property "might" be a good place to park your money until that say to protect that money from inflation, but when you use debt to purchase the property you open yourself up to the risk of deflation.

My personal thought is that 50 is not the time to be taking on leverage - rather consolidating for retirement.

The exception to this might be if you or your husband were thinking of going into business for yourselves and still have the tenacity to make it work and a LOT of experience in the industry.

If you haven't got something worth leveraging then it's my opinion that is it too late to be doubling down and rolling the dice.

Read this for more perspective on what "leverage" is - http://www.invested.com.au/85/leverage-strategy-37587/

If you want to "boost" your super at this stage I suggest working more in the few remaining working years coupled with saving a higher proportion of your earnings.

The best thing you can give your children is a good set of financial role models. Focus on securing your own financial futures, then teach them how to secure their own, don't give it to them.

That's my two cents.

Maybe.

Agreed.

Passionately agree.

The people that run a lot of "free" investing seminars of any form are often getting paid somewhere along the line (let's just call it human nature). The trick is working out where they are getting paid and then double check if your buying into a sales pitch or good investment strategy.

I have been to a number "free" investment, business, motivational seminars some are worth the time. Most are not.

 

Hi Chris thanks for the feedback. This group set up a meeting with an independent accountant and strategist ... who will put together a couple of different plans/options for SMSF based on our circumstance .. we choose which option we think we should follow .. if any. They seem on the up and up. we definitely did not feel any pressure. We're going to see what they come up with and reassess. I'll keep you posted.

 

You're not too old, but with a house price correction inevitable in the future, be it next year or sometime during this decade, I would be wary about investing in property. What happens if it comes down at a time when you need your money back? You won't have the luxury of holding on through tough times, you'd have to sell at a loss! Disaster!

Yes, house prices can go backwards, and in my opinion (take it with a grain of salt) .. they will.

 

They will help me find a property. Strategist and accountant advice are independant