Ryan Smuts: Why it is never too late to start investing in property

Friday, February 08, 2019

Starting early definitely helps – when it comes to any kind of investing. Time is an investor’s best friend. Remember what Einstein said about compounding?

That being said, it’s never too late to start today. There is a Chinese Proverb that says “The best time to plant a tree was 20 years ago. The second best time is now.” Investing is much the same. Focussing on what you didn’t do when you possibly could have does nothing to improve your situation. The most important thing is to focus on the ‘now’.

There a several key reasons for this:

At the moment in many regions (particularly Auckland), it is more a buyers’ market than a sellers’ market. This means that there are more opportunities to be had. You are in the position to negotiate hard with the vendor and buy at a discount, which you’d find is extremely important in the property game when it comes to accessing equity and recycling your deposit. The key to any investment is understanding you make your money when you buy.
Real estate income can supplement your existing income. Even if it is small at first, additional income towards your bills, or even towards that next vacation definitely is both helpful and motivating. Retirement should also be a focus, realising that one day when you stop working, you are going to need some level of income to continue your current lifestyle.
It is a relatively simple process and not overly time intensive, particularly if you have the right team around you. This means you can get into the real estate investment industry part-time, perhaps after hours. A past mentor once told me you can spend your days making a living, and spend your nights building a fortune.
Your investment may be in the form of an owner-occupied property. Security is important, particularly in later years when it comes to retirement. Financial burdens can often be heavy, and dealing with this at a point in your life when your ‘earned’ income may decrease, you want to ensure that these bases are covered. Furthermore, emotional stability is earned by owning the home you live in – while you may still have a mortgage to pay in retirement (which depending on how aggressively you repaid your loan may be lower than what rent payments would be), the benefit is that your rents won’t be lifted and your landlord can’t request you to move when they decide to.

While I definitely am a property enthusiast as an investment vehicle, it definitely does provide many benefits that other investment cannot guarantee, and due to this are a great investment class in my opinion. That being said, you need to pick the basket wisely that you lay your eggs into, so be certain to do your due diligence before investing your cash into anything.