Baby boomers to seize real estate potential

Baby boomers have typically done exceptionally well when it comes to maximising the potential real estate can offer – although in recent times the booming has been more in favour of much younger generations such as millennials. 

In terms of property, the year 2021 may well be remembered as the time when millennials were able to join the real estate market in droves. 

Thanks to interest-rates being at a record low, property investment has been flipped on its head. 

Where not too long ago it might have been impossible for a newly-working millennial to buy real estate, now it’s the reality, and more and more younger generations are becoming property investors.

But, what about the other end of the generational spectrum? 

BABY BOOMERS AND REAL ESTATE

Baby boomers – people born just after the Second World War in a global population boom – traditionally came into the real estate market much more easily than later generations.

The reason for this is that property used to be affordable compared to income. You grew up, got a job and bought a house. That’s just what people did. And what did they do with the rest of their money? They put it in the bank. 

But the idea to own a property and live off savings, as so many Boomers intended to do, hasn’t exactly gone to plan.

TIDES ARE CHANGING 

Today, the tide hasn’t just turned. It’s tsunami-ed all over the retiree strategy of living off savings and the interest it earns. So, why is that?

With banks dropping interest-rates to an all-time low, they need to level that decrease out. They’re doing that by reducing deposit rates. 

In 2019 the big four banks’ average deposit rate on a standard savings account was 2.47 per cent. As of October 2020, it was 0.75 per cent. That’s a pretty hefty drop, especially if you’re relying on that money to keep you afloat through retirement.

So, what can retirees do to build their income and make a liveable amount of return on the cash and assets they have?

BABY BOOMER POTENTIAL IS HUGE

One word: property.

Real estate returns at a gross level of up to 10 per cent. Even when you factor in the inevitable costs of running a property, net return can grow to up to seven per cent. 

While younger generations still have the opportunity to work, re-train, or even study in order to improve earning potential, Baby Boomers really only have their assets and what they do with them to create passive income and greater wealth.

The option to take savings that earn very little interest out of banks and put it into the right kind of investment property is a real option for retirees who want to increase their cash-flow potential.

The caveat of course is ensuring you buy the right property. 

If you, or a family member, hasn’t house-hunted since the ‘70s, it’s important to be aware that things have changed and what people wanted back in the day, may not be desirable now.

Equally, buying a property for investment and to create passive income is not the same as buying your dream home where you’re going to live out the rest of your days.

Researching what is renting well, areas that are popular to live in and where you can expect the most amount of value growth, is vital.

LEARN HOW TO BE A BOOMING SUCCESS

And that’s where the experts come in. People like us at Positive Real Estate eat, sleep and breathe property investment so you don’t have to, and will be able to give well-educated, experienced guidance in property investment at any age.

If you would like to learn more about how to be a successful property investor, join one of our free property investment seminars.

There you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

Spaces are limited. Book here. 

Sam Saggers

Co Founder Positive Real Estate