Jul 20, 2020 1:25:02 PM

Investing in property could set you up in retirement

Topics: Selling, Property Investment, Mortgage Broker 0

While the thought of retirement might be exciting, for many it’s also fraught with some concerns, particularly around affordability. The days of relying on your “super” or the Government old-age pension are no longer the norm, which is why having a retirement plan in place is a non-negotiable. Investing in property could be the kickstart your retirement plan needs to supplement you in leaner times. But before you jump in, take a look at the pros and cons of property investment.

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Pros of investing in property

Property investment remains the best and safest way to invest money, particularly in these uncertain times. Despite its ups and downs, property values continue to trend upwards and provide astute buyers with a long term investment opportunity. Here’s why we think investing in property is a good thing:

  • It’s a reliable source of income. Using the rental income from tenants can help you pay off your mortgage faster and once your loan is repaid in full, the rental income can be used to supplement your super.
  • Capital gains earnings. Making smart choices about where and what you buy could mean earning a profit when you decide to sell later on. Adding value to the property through renovations and upgrades could reap even greater financial rewards when you sell.
  • Tax deductible. Throughout the life of your mortgage, negatively geared properties are tax deductible, and when you decide to sell you may be entitled to claim up to 50 per cent discount on capital gains tax (provided you’ve owned the property for more than 12 months).
  • Fewer risks. Compared to other types of investments, investing in property – especially long term – is a far safer option. Over time as your property increases in value and your equity grows, you may be able to leverage the property to grow your portfolio – buy more investment properties - and secure even greater returns to add to your retirement fund.

Cons of investing in property

Of course, there are some downsides to property investment and these include:

  • The cost of property investment. As the saying goes, you have to spend money to make money and that means staying managing ongoing costs like maintenance, vacancy costs, insurances and taxes.
  • Paying tax. Once you’ve paid off your mortgage, your property may no longer be negatively geared as you’ll likely be receiving more in rental income than what you’re paying out. That means you’ll be charged tax on your rental income.
  • Volatile property markets. In uncertain times, property markets can dip causing property values to fall. Similarly, making a poor investment decision – buying in the wrong area for example – could cause a drop in your property’s value.

A retirement plan for you

Are you prepared for retirement? You may think it’s too early to begin planning ahead, but property investment is a long-term game. If you’d like to find out you can get ahead and kick off your property investment portfolio, get in touch with one our mortgage brokers. Simply complete this form, and a broker in your area will be in touch.


While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.