Over 50s should consider strategy

nizi

Over 50s should consider strategy
Posted on Saturday, July 10 2010 at 12:00 AM

Over 50s can lose money both now and later if they use the incorrect strategy for their investment properties, according to property investing expert, educator and mentor Jennie Brown.

She says there's confusion among mature Australians about whether property is an investment opportunity available to them due to their comparably shorter income earning years ahead of them.

"It's true that many investment property strategies focus on earning capital growth and making money on it over the longer term," she says. "And it's true that most properties have risen in price at a faster pace than inflation in the last 10 or so years.

"This is why all the experts say that real estate is the most exciting type of investment that there is.

"It is also a reason why property has done so well and been the investment avenue of choice for so many over recent years.

"However, the issues with the 'buy and hold' strategy when you are over 50 years old are long mortgage terms, and ongoing costs and expenses while you wait to make your fortune."

Brown says over 50s who are able to purchase an investment property outright are in the best position to benefit from the passive income an investment property provides.

"With the same amount of money, I would suggest they purchase newer, low cost, multiple dwellings rather than a single, more expensive house, simply because their rental income will potentially be increased with multiple investment properties," she says.

Meanwhile, for over 50s who can't buy an investment property outright, Brown suggests strategies that make money over a shorter period of time.

"If they can get approval to subdivide from one property into two, or two into four, then that would be ideal and they can make money over a nine to 12-month timeframe," she says.

"Strategies like this are often easier, less time consuming and more profitable than the traditional renovation type strategy."