For many investors, their long-term goal is to retire with a financial nest egg that will keep them and their family comfortable for many years to come. But is that dream really possible if you’re only looking at property for the first time when you’re already in your 40s?
Michael Beresford is the director of investment services at OpenCorp, and he says there’s no reason an investor wouldn’t be able to build an impressive portfolio within just a few short years, while still enjoying the lifestyle they’re accustomed to.
“A lot of people in their 40s think they’re too late to start investing in property, but that’s definitely not the case,” Beresford says.
“Great things can be achieved in a relatively short time frame, and I’ve seen first-time investors in their early 50s go on to build serious portfolios.”
However, Beresford – who has helped thousands of Australians amass over $400m in property – says there are some common barriers that stand in between older investors and financial freedom.
One of the most prevalent is ‘analysis paralysis’, which typically occurs when investors have a strong desire to fully understand the market before making an initial investment.
“Older investors have worked hard to create what they’ve got, so they’re fairly risk averse and have a desire to understand as much as possible before they start,” Beresford says.
“Unfortunately, that appetite for detail can sometimes cause confusion, delay things further, and even prevent them from taking action.”
Instead, Beresford says investors should adopt a tried-and-tested method and then embark on the learning journey while their investment properties are steadily gaining value in the background. “I can’t stress enough the importance of taking action,” he says.
“We have an extensive range of educational tools to help investors learn as they go, but there’s no reason they can’t be building their wealth at the same time.”
Beresford, who has been with Open Corp for almost seven years, says the accelerated duplication strategy is the best option for investors who have a limited window to acquire an asset base that will provide the foundation for a meaningful difference in retirement.
The strategy relies on investors being able to identify when their usable equity has increased so they can channel that equity into deposits for future investment properties.
The key is to have a system that tracks any market price movement: when there’s a lift in price, investors revalue their portfolio, increase their line of credit, unlock usable equity and duplicate.
“It’s the easiest way to help you build your property investment portfolio quickly, because you don’t have to save for each deposit,” says Beresford. At the same time, it also means investors can maintain the lifestyle they’re used to.
However, while the accelerated duplication strategy can help investors achieve a seven-figure portfolio in just a few years, Beresford says some investors are deterred by the thought of taking on any unnecessary debt.
“That can be a major mental hurdle which investors in their 40s need to get over, but we try to remind them what happened with their own house,” Beresford says.
“When they bought their own house, it was probably a stretch financially, but by acquiring that property and taking out a loan to fund it, they were able to grow their asset over time – what we’re doing with investment properties is exactly the same, but it has multiple benefits.”
“We were all first-time investors ourselves a long time ago, so we understand some of those anxieties and we can help”
Of course the accelerated duplication strategy only works if investors can keep a keen eye on the market and are buying good-quality investments every time – if investors make a misstep, it can actually compound their risk. “It’s very easy to make a mistake and buy the wrong investment property,” says Allister Lewison, co-founder and director of OpenCorp.
“Even if you understand the right market to be in and the right area to be in, you might end up choosing the wrong property, and instantly nothing else matters.
“There are so many risks involved, it really is like a minefield out there, but we’ve done it for a long time and our track record and client testimonials speak for themselves.”
The organisation pools the expertise of 80 property experts to identify ideal opportunities for investors, and around 180 hours of research goes into finding the right property for each person.
“We were all first-time investors ourselves a long time ago, so we understand some of those anxieties and we can help,” Beresford says.
“We can also provide a complete outsourced model that allows investors to spend their time doing the things they enjoy while we take care of their investment portfolio and manage the process for them.”
Originally published as: https://www.yourinvestmentpropertymag.com.au/strategy/never-too-late-245393.aspx