Five Things Every Australian Real Estate Investor Should Know

<a href="http://www.realwealthaustralia.com/wp-content/uploads/2016/04/event_78009742 you can look here.jpg”>Financial FreedomAussies love property. Over 8% of our population have at least one real estate investment, according to ABS figures, simply because it’s understood to be such a powerful tool to create for future wealth.

Australia is certainly a lucky country, but there are some things that every Australian who’s purchasing real estate should know.

Property investment is not a hobby: it’s a defence against poverty.

Unless you’re injured and sent out of the workforce early, retirement doesn’t just happen. It doesn’t sneak up on you. We all know it’s coming and every real estate investor needs to know why they wake up in the morning and work their way up another rung on the property ladder.

It’s because in Australia, the retirement statistics are downright scary.

I have 5 things that you need to know – and remember – every single day of your investment career. It’s why you work hard, sacrifice time and luxuries, why you go against the flow of your friends and families, and why you step out on a limb while others “play it safe”.

1. Aussies are retiring poor.

A study conducted by the Australian Bureau of Statistics in 2014 revealed that only 28% of people retired with enough money to live comfortably.

That means over 70% of Australians are relying on a tiny government pension to get them through – often downsizing to release some cash, or living a meagre existence to stretch their dollars.

And that’s after working hard for decades beforehand!

These statistics show that Aussies don’t plan for their retirement, and the final result is a less-than-happy ending.

2. Aussies think that owning a family home will see them through retirement.

Too many Australians believe that having a mortgage-free home will give them enough space in their cashflow to live happily, or allow them to sell for profit that they can live on.

But what if you don’t want to downsize or move to a cheaper neighbourhood, because you want to have enough room for the grandkids? What if you are forced to sell when the market is down and you don’t get the price you were expecting?

Owning a home outright is certainly a goal we should be aiming for – but it’s not the be-all and end-all of a retirement plan. A wealth plan focused entirely on one asset, especially one that likely wasn’t bought for capital growth, is a risky plan indeed.

3. Aussies think that one investment property is all they need.

Sadly, very few investors move past their first property. While every asset you own is a boon to your future wealth, one property is just not going to cut it when it comes to supporting your retirement.

You’ll need to calculate what age you want to retire, how much money you realistically need to retire on according to the lifestyle you want, and then how many properties you’ll need to get you there.

Combine that with an effective superannuation fund and you’ll be able to live the life you dreamt of through your working years.

4. Aussies are living longer and working longer, but have less money to show for it.

Recently, the Australian government stated that by 2035, the retirement age would be 70. Yes, 70 years old! The average life expectancy for females is 85, while for males it’s 79.

So if you retire at 70, you’re not giving yourself a whole lot of time to enjoy a work-free life!

People are also working past the retirement age to supplement their income, because they simply don’t have enough in their savings and superannuation.

While some people might enjoy working into their twilight years, for others it’s a strain and a burden – an unnecessary one, if the right gears had been put in

motion in preparation for retirement.

5. YOU don’t have to be one of those people.

These statistics are frightening. And yes, you should be scared! You should be scared right into jump-starting your real estate portfolio, planning your next property, or ramping up some of your goals.

Nobody should have to live on a pittance instead of enjoying their freedom, feeling peaceful and having the ability to give generously. Nobody should have to sell the home they love just to “get by”.

More and more retirees are relying on their children to support them as they grow older. But what about having a passive income stream that allows you to not only live financially free, but to support your children as they navigate the ups and downs of life?

Don’t join the 80%. You might have to swim upstream for a while, but when you’re floating effortlessly in your lagoon, you’ll be mighty glad you did!

Til next time, happy investing!

Helen Collier-Kogtevs

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