Property Is The Leading Choice of Investment for Australian Retirees

Property has been a top choice for Australian retirees over the years.
It can provide you with a safe place to spend your golden years or can provide you an income to live off once you stop working.

The best time to invest in property is at least 10 years before you retire. Your timeframe is shorter if you are closer at retirement age.

But there are still opportunities for property investments to older investors.

This is where customised investment portfolios can help you to ensure your investment is suitable to your lifestyle goals and prepare you for your ideal retirement.

Benefits of Property Investments During Retirement

Investing in real estate for retirement has many benefits. Take advantage of these upsides to build your retirement wealth quickly and safely:

  • Regular income from rental properties
  • Revenue adjusts to inflation
  • Increasing equity over time
  • Can be used as leverage for investing in multiple properties
  • Tax benefits

Downsides of Property Investments During Retirement

Investing in property can make you wealthy but it has its inherent risks such as the following:  

  • Low liquidity - it may take months or even years to sell a property
  • Requires ready cash for investing upfront
  • Requires work on the onset
  • Requires special knowledge and skills

Before You Spend Your Pension Fund

Before spending your pension fund, make sure that you understand the upsides and downsides of investing in real estate for retirement. 

Real estate investing, especially for the purpose of building your retirement wealth is a critical life endeavour that should not be handled as a DIY task. 

It is ideal to work with professional investment advisors who have the expertise and experience in retirement investment planning.

Frequently Asked Questions

Are rental properties good for early retirement?

Yes, owning and operating properties for rent can be a good way to secure a comfortable retirement. 

But just like any other form of investment, a rental business is not foolproof and many Australian retirees lost their wealth. 

You need to possess certain types of knowledge and skills to make sure that your rental business will help you achieve your retirement goals.

How many investment properties do I need to retire?

There is no fixed figure on the number of investment properties you should possess so you can live comfortably in your retirement. 

You need to consider different factors such as your retirement income target, preferred lifestyle, your availability in managing the properties, local economic factors, loan rates, and others.

The best way to sort out the ideal number of properties you need is to work with an investment advisor, allowing you to completely understand these factors. 

Should you sell an investment property before retirement?

Some investment advisors say that the longer you keep your property, the higher the capital gains you can enjoy once you sell. 

But you need to remember that maintaining a property or multiple properties can be expensive, and an important stage in your life such as retirement could mean it is smarter to sell the property. 

You may sell your investment property to unlock your equity and use your money elsewhere. (But be sure to check this with a retirement investment advisor as this may affect your Age Pension eligibility). 

Other pre-retirees are also selling their rental properties if they are not satisfied with the recurring revenue they are receiving. 

For example, if the property is negatively heated and the capital growth is not good, it may be time to invest your cash somewhere else.

Is rental income taxable during retirement?

During retirement, you may take advantage of tax rebates and offsets to a certain limit without paying income tax. 

A rental property is one asset that you may keep outside your superannuation and still receive income without paying taxes. 

Note: The information presented here should be used as a general guide only and not as a financial advisor. Please visit the Australian Tax Office (ATO) website for complete details or work with a tax accountant for professional guidance.

Talk to a Property Investment Advisor Today 

TENX Wealth has a team of property investment advisors who can help you come up with a plan that is suitable for your goals and personal circumstances.