Rise of new investors
PROFITING from property has made many older Australians wealthy in recent years, but a new breed of younger investors is taking them on.
Finance specialists say interest among investors aged in their 20s and 30s is growing. But with home prices high and wages growth sluggish, how can they afford it?
Marissa Schulze, director of Rise High Financial Solutions, has built a significant property portfolio since purchasing her first house at age 18 for $60,000, and suggests buying low and buying early.
“They should look for properties they can afford to keep, with good cash flow. Most likely they will be in areas that they will not want to live in,” said Ms Schulze, 34.
“Sometimes it’s better to buy something a bit cheaper and buy it sooner. I’m seeing 18 to 26-year-olds still living at home and being careful with their money and saving – they’re really able to set themselves up for the future.”
Ms Schulze said young people should develop good savings habits before becoming investors. In her new book The Rise High Investor, she says the best way to predict your future is to create it: “Do not save what is left after spending, but spend what is left after saving.”
Binvested.com.au cofounder Nathan Birch, 32, also started at 18 and now owns about 200 properties. He said people should target properties that were below market value, had upside for growth and generated enough income so they cost nothing after expenses.
“Draw out your plan and work backwards from where you want to be in the future, and what steps you need to take to get there,” Mr Birch said. “Be logical – it should be treated like a business. Leave your emotions at the door.”
If properties produce more income than they cost, investors can sail through most price slumps and interest rate rises.
University lecturer, author and property investor Peter Koulizos said young people were noticing that permanent jobs were a thing of the past and were seeing property investment as “a way of securing their lifestyle into the future”.
“A lot are staying at home and saving their money, but there’s also a huge amount of parent guarantors,” he said.
“The children have the cash flow but they just don’t have the deposit.”