— and preferably when they are single and in their 20s … but much more on that later.
According to the Women's economic security in retirement insight paper (2020), the largest asset held by Australians in retirement has traditionally been property. However, the number of Australians, including retirees, who own their home has been decreasing.
Across the age groups 15 years and over, the proportion of individuals who owned their home and were not paying a mortgage was 30 per cent in 2015–16, which was down from 35 per cent in 2003–04. Similarly, the insight paper found that 76 per cent of individuals aged 65 years and over were homeowners and not paying off a mortgage in 2015–16, which was down from 79 per cent in 2003–04.
These percentages probably don't look too bad at a glance, but when you turn them around the other way, this means that nearly a quarter of all Australians are either renting or paying off a mortgage after they turn 65 years of age — up from 21 per cent about 12 years before. Could you imagine having to do that with little to no superannuation, plus living week to week, barely surviving on the pension?
It's difficult to determine why so many people are still paying off a mortgage in retirement, but it's likely due to a lack of financial literacy to start off with. One way that you can prevent this situation becoming your story is by joining the property‐ownership ranks earlier, including adding one or two properties to your portfolio over the years — these can be sold to pay down mortgage debt or to create cash flow in retirement.
Together, we have decades of experience in the property investment sector, including both being successful property investors ourselves. Over the years, we've learned what works and what doesn't.
We've stuffed up and bought the wrong type of dwellings, or purchased in inferior locations and paid dearly for our boo‐boos. Nicola sometimes even calls her property investment strategy ‘scrappy' for the wheeling and dealing she has had to do to get the deal done. You can hopefully learn from our mistakes and never have to watch the value of your so‐called asset plummet. We have walked the talk, and we've experienced the ups and downs that can come with owning property for decades — we're still standing and we're still smiling!
We believe that if this book can motivate, encourage or nudge even one woman to invest in her first, second, or even her third, property then that is success to us.
Our wish is to create a whole community of women who are taking action to secure their own financial futures — and who will inspire the next generation along the way.
WHAT WILL YOU LEARN?
We're going to be honest with you throughout this book, which means that we won't be providing a step‐by‐step approach that you can simply follow then retire to the Bahamas!
Rather, you must consider everything you read in these pages as the start of your education on property investment strategy. You will learn what we believe you should do to improve your chances of maximising your returns and minimising the risks. But we don't believe there is a cookie‐cutter or one‐size‐fits‐all model that suits absolutely everyone.
In fact, creating wealth, security and freedom through property is all about creating a bespoke model that is the best fit for you as an individual. There is very little out there to educate women about the basics of property investment, written by women like us, who have been there and done that ourselves.
Over the next 11 chapters, we will guide you through the beginnings of your strategic‐property‐investment education. We have tried to provide as much detail as possible on the key elements required for you to become a successful investor of property. That said, there is not enough room to cover off on every single detail or possibility in great depth. However, you can learn heaps more via thefemaleinvestor.com.au and via our podcast, too!
We want all women, whether you are buying a home or an investment, to understand the fundamentals of property as an investment vehicle, so your funds and your real estate asset can work the very hardest for you over the years — whether you are living in it or renting it out.
So, let's get started, shall we?
CHAPTER 1 WHO CAN HELP: Getting your team on board
Long before you even start looking at property porn (as we like to call it) online, you should make sure you have the right team of people in your corner.
Remember that you're probably about to spend hundreds of thousands of dollars on an income‐producing asset that will help set you up for life! Why wouldn't you seek out the opinion of some professionals who do this sort of stuff every day of every week?
YOUR EXPERT TEAM
Skimping on paying for expert advice is one of the biggest mistakes investors can make — female or male — no matter how experienced they think they are.
Yes, you'll pay for their services in the short term, but their advice can save you megabucks over the long term, and can also save you from making even more costly mistakes in the future. If someone is offering you their ‘advice' supposedly for free, you should run a country mile, because they are only interested in their wealth creation and not yours!
Here is an overview of who we think you may need on your expert team, depending on your individual requirements.
MORTGAGE BROKER
A mortgage broker is someone who liaises with you and the banks, or other lenders, to arrange a home loan for you.
Mortgage brokers are trained and qualified to provide you with mortgage‐broking advice. By law, they must act in your best interests when suggesting a loan and a loan structure for you. Generally, it doesn't cost you, the borrower, any money to consult with a mortgage broker and we believe the service they provide — and the headaches they can prevent — is often underrated.
All banks and lenders pay the broker a commission for ‘selling' their products. Some brokers get paid a standard fee regardless of what loan they recommend. Other brokers get a higher fee for offering certain loans.
Sometimes a broker will charge you a fee directly — instead of, or as well as, the lender's commission. If you're not sure whether you're getting a good deal, ask around or look online to see what other brokers charge, if anything.
A good mortgage broker works with you to understand your needs and goals. They will:
work out what you can afford to borrow
find options to suit your situation
talk to you about many different banks, lenders, and available loan products.
Conversely, if you go directly to the bank, that bank will only ever talk to you about their own loan products. Mortgage brokers are independent advisers, whereas the banks are not.
Getting a good recommendation is super important. Always check their qualifications and whether they belong to their industry body or association.
ACCOUNTANT
A great accountant will do a lot
