It’s a pretty obvious question now that I think about it, but interestingly, until last week no one had ever asked me whether there is an expiry date on property investors. And to be honest, I’ve never really thought about it. But that’s most likely because I’m still hip and funky fresh. Man, I can already feel that I’m going to offend a lot of people in this blog article. Great.
Can you be too old to invest in property? Ultimately, the answer is ‘negative’. However, as we start to turn grey, become toothless and permanently hunched over like a homeless person picking up change from the street, our options do start to become horridly limited. It’s a funny thing old age- there’s nothing good about it, yet we’re forced to ride it out. It just doesn’t seem right.
Firstly, how old is “old”? In social terms, “old” is probably in the eye of the beholder. To an 80 year old, being 60 years of age probably isn’t old. But to a 20 year old, it could be a different story. In property investment terms, I’d say 65 years is old, the UK retirement age. The big SIX-FIVE is pretty significant in property investment, and I’ll begin to explain why shortly.
It’s important to recognise that simply buying a property is an investment; whether you make a profit is another issue altogether. Consequently, nothing can stop me from buying a property outright on my 90th Birthday and selling for a profit on my 91st Birthday. That alone would be a successful short-term property investment.
The limitations of investing in property at an old age
- The biggest kickback of old age and property investment is the access to finance. Very few mortgage lenders, if any, will consider lending money to anyone over the age of 65. And if they do, the amount would be minimal. This is because lenders want mortgage loans repaid by normal retirement age, which of course makes perfect sense. Even someone at the age of 55 would struggle getting a 25 year mortgage; they would most likely only be able to get a 10year mortgage. Most lenders work around the 65 age bracket.
- Once you really start getting to the very late years of life, your risks start to become greater. I say that because you no longer have the luxury of investing for the long-term, but purely for the short-term. For example, if you’re 80 years old, and invest in property during a property boom, in 2 years time the market may start to dip. The market may recover after 10 years and put you back into high profits. But those 10 years are not a safe bet, because you may no longer be around (how do I say that respectfully?). So essentially, the older you are, the shorter your opportunity becomes for a long-term investment. At a younger age, you have the opportunity to recover from early hits.
- Not exactly directly related to property investment, but this issue is definitely an important factor- stress. Buying property can be stressful. Why wouldn’t it be? Almost 99% of property trades have at very least minor hick-ups, and a lot of money is put on the line. Buying property is a big deal, regardless of how big your portfolio is. At an old age, the added stress of investing in property can speed up the process of hearing that final nail getting hammered into your coffin. It’s important to consider whether it’s worth putting your body through so much stress at such a late stage of life, when you could be chilling like Snoop Dogg.
The options of investing in property at an old age
- If you’ve got the cash, you can pretty much buy a property at any age. As mentioned, it’s when you need financial support that property investing can get a little bit tricky. But if you were born in the 50’s, and like most of those veterans, have a mattress full of cash, the only thing that limits you is your budget. You can purchase a property outright and put it on the rental market, or even leave it empty and sell it after a few years in a climbing market.
- For the courageous with spare time and in dire need of a project, there’s always the option of property development. Again, it depends on whether the finance is available to its entirety. But this could be a great short term project to make a big chunk of change, regardless of what age you are. As long as you have the cash flow, enthusiasm and a strong heart, that’s all that is required when it comes to development.
- Property investment doesn’t just need to be about personal gain, it can also be a good vessel to give those we love a boost in life. As mentioned, buying property alone is an investment, so who says we need to prosper through our own investments? Have some spare cash lying around? Buy a property and leave it behind in your will to someone you love.
Out of curiosity, has any of the elder generation invested in property? If so, what’s your story?
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.