With the Council of the Ageing recently welcoming the federal government decision to keep financial advice regulations, now could be a great time to look into property investment for your retirement years. It is a great way to build equity, and offers a number of different ways in which you can benefit. Here are just a few ways that real estate investment for retirement could work for you!
Slow and steady wins the race
The story of the tortoise and the hare will not apply to every piece of real estate, but it can! Property is not a particularly volatile investment, so as long as you do your research and take on sound advice from the likes of agents and financial planners, there is every chance you will see solid capital gains over time.
If you plan well in advance and buy a home long before you retire, you may see some significant steady value gains that allow you to sell for a tidy profit as you retire.
Positive gearing to have you cheering
Another way that buying a rental property can benefit you into retirement is through making it positively geared. This means setting the rent that tenants pay above your mortgage repayments, so you earn profits. While you will pay tax on this, it keeps you afloat.
Keeping it in the negative
The alternative is negative gearing, where your rent does not cover your mortgage costs. This comes with its own tax write-off benefits, but means you have to have more capital put aside to cover the shortfall in the short term. The other side of this is you may be able to achieve some great windfalls in the long term!
Everyone will be in a different situation when it comes to investing for retirement - shop around and see what works for you