Property investment is easily one of the best ways to fund your retirement. It’s recommended that everyone tries to invest in some form or property while they’re young. The younger you are, the more chance you have of growing your investment and expanding your portfolio. In fact, many people have had so much success with property investment, it has allowed them to retire at a young age!
However, there’s is some caution with this idea. Investing in property isn’t as easy as it might seem on paper. In fact, there are plenty of mistakes you could make that will ruin your investment and leave your retirement fund in tatters. So, here are two simple and easily avoidable mistakes you don’t want to make.
Don’t Invest Too Early
I know, I just said that the younger you are, the better. But, there’s definitely a limit for how early you should invest. Try and invest in property when you’re too young, and you could spend all your savings, leaving you with an unbelievable amount of debt. Manage your money accordingly, work with a financial advisor and they can view your finances to tell you if you have enough to make an investment or afford a down-payment. Thankfully, a lot of companies are wise to people investing with too little money. They often ask to see your pay stub before they grant you a mortgage to buy a property. As it notes over on ThePayStubs.com, a pay stub is proof of income. If you can’t prove you earn a good amount of money to pay the mortgage, you won’t get one. In fact, this is a good way to see if you’re ready to invest or not. If mortgage dealers are turning you down when they look at your pay stub, that’s a sign you need to earn more before investing.
Don’t Sell Too Soon
It’s natural to want to sell your investment whenever you see a price increase. Too many people invest in houses and then a property boom happens, making them sell their assets. In reality, you won’t get more for your investment during a boom, compared to if you held onto your house for a good few decades. Think about it, you won’t retire until you’re in your 60’s, maybe 50’s if you’ve had a very successful life. It makes sense to invest and sit on your investment for as long as possible. Over the course of a few decades, property prices will always increase, as this piece on cnbc.com shows. Sell too soon, and you could miss out on a lot of money.
These two mistakes could land you in a very bad situation heading into your retirement. When done properly, investing in property is a brilliant way of funding your retirement years. The great thing is, you can literally buy a home in your 20’s, and live in it until you retire. That’s a good 40 years of worth you’ve got out of the house, and you will almost always be able to sell it for more than you bought it. Or, there are other options like buying properties and renting them out, etc. The options are there, and it’s a good retirement funding option.