Mar 1, 2012

How to Buy a Home for Your Retirement

Buying an investment property for your retirement is a basically good move. You need to make certain that investment delivers what you want, when you want it. The most efficient form of property investment for retirement purposes is to plan ahead, and have your property paid off and ready to use as you wish, preferably long before retirement.

Retirement goals and property investment issues
These are the core goals for retirement property investing:

· Financial security-The real cost of retirement is actually an equation- Capital and income less costs. New Australian market research has discovered that those who’ve paid off their properties have far better cashflow. This is a natural development of reduced financial commitments and a simplified income/outlay dynamic.

· Lifestyle- It follows from the better cashflow effect that retirement lifestyle is much better. Retirees don’t want or need any risk of additional costs, and naturally want to be able to maintain lifestyle quality.

Seems straightforward, doesn’t it, but there are potential traps that can sabotage even these very basic requirements.Property investment needs to be seen as a risk management exercise for retirees. The idea is to avoid problems during the purchase process.

These are the issues:

· Financial over-commitment- This is a potential killer. Best practice is to buy for retirement early, to minimize outlays. Over time, circumstances can make financial commitments complex. The degree of difficulty equates to the amount of outlay, in terms of buying any
investment property.

· Market value- There’s a good side and a potential bad side to the property market for retirees. A rising market can undeniably generate good returns on investment over time, and even an opportunity to upgrade. A static market or downward market can remove the opportunity, and leave you with a “stuck” investment.

· Interest rates-This is a cumulative effect which can reduce retirement capital over time. Interest rates can rise, adding to the outlay while the actual ROI is flat, so getting out of an underperforming or costly investment by selling can be a loss-making scenario in a tougher long term buying environment.

Safety first- Getting what you want and avoiding risksBefore you do anything at all about buying a property for retirement-

1. Get professional property investment advice-Just do it. The more you know about your investment options and the better your sources of information, the simpler it is to invest safely and wisely. You may be astonished at the quality of information available from these sources.

2. Get financial advice- There are multiple options available for retirement investment, including many with definite tax benefits. You need to know exactly what you’re looking at financially with investment properties, so make sure you’ve got the money issues well under control.

3. Be patient- Good property deals don’t just happen. You need to know how to find them and check them out, and how to take advantage of them quickly when you find them.

The good news

You’ll definitely find what you want, with the right advice and good planning. You won’t need to worry for a second. Just make sure you do things properly.

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