In this article CRAIG WILSON, CEO of PiC Group, looks at the option of using income created by owning an investment property portfolio to fund your retirement lifestyle.

It’s still the Australian dream to own your own home opposed to paying off someone else’s mortgage by paying rent.

For many owning investment properties is a part of retirement planning.

The concept being –  that rental income from investment properties that have been purchased whilst working will form part of an income they can live off once retired.

However, before rushing out and buy an investment property to fund your retirement there are things and should be considered:

When do you plan to retire?

The average age of retirement is currently 65 and the average term of mortgage is 25-30 years. You need to consider the timeframe of your mortgage and how it works into your current age (will this impact your plan of retirement?)

How much do you need to retire?

Consider if you plan to live a lavish lifestyle when retired. Do you want to travel? Or perhaps you just want to get by comfortably. Planning a budget for your retirement is KEY.

The value of the property vs return on investment

If you plan to live off rental income to fund your retirement, you will need to make sure the return of the investment property will cover your cost of living.

Investment in multiple properties may be the way to go or investing in one property of larger value.

Additional expenses on your investment

You also need to keep in mind additional expenses like council rates, property management fees, income tax, maintenance and repair expenses.

While you should consider all the above, using investment properties to fund your retirement fund will depend on your individual circumstances, but they can offer a great addition to your retirement funds.

If you would like to talk about anything property related send me an email, call me on M: 0418 872 202 or visit our Facebook @PiCGroupteam

Craig is the founder of PiC Group since 1993 and SiNC Surveys, and a successful private investor in his own right, coming from a background in the insurance, financial planning and real estate development industries.  

General Advice Warning: This blog is not designed to replace professional advice. It has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before making any decision as to what is appropriate for you.

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Goal Setting Using Investment Properties to Fund Your Retirement