Are you sitting on a gold mine? 7 simple property strategies to fund your lifestyle and retirement

Author: Tom Haigh

An easier life, an earlier retirement, and more wealth to fund it all. Sounds like a dream doesn’t it? It needn’t be. If you’re looking for opportunities to achieve the above, it may be as simple as looking in your own backyard…

Let’s take a quick step back…in our previous blog post we discussed the deep emotional connection all Australians have with property, particularly our principal place of residence, a connection that can often blind us from seeing two crucial things:

  1. The impact our property may be having on our lifestyle, and

  2. The potential to utilise that very property to fund our lifestyle.

If we dig a little deeper, it’s easy to see why those emotional connections exist. The property we own is the home of so many memories, it’s often something we have invested blood, sweat and tears into, and has helped us to become part of the neighbourhood and community that are so dear to us. This connection is further evidenced by the huge proportion of senior Australians, approximately 66% in fact, (Source: National Seniors Australia 2017), who would prefer to ‘age-in-place’ rather than ‘downsize’ elsewhere - my 90+ year old grandparents included.

The only problem is, particularly for those across the country approaching retirement age, most if not all of our personal wealth is tied up in the places we call home. In a 2017 study conducted by Mercer, more than 60% of retirees are expected to run out of savings during retirement, despite having considerable wealth in the form of property.

Sounds depressing doesn’t it? I’m here to tell you it doesn’t need to be this way. We all get a choice, and it’s your responsibility to choose whether to travel down the same path as everyone else, or to do something different, to take the road less travelled and to reach your ideal destination. No one will do it for you.   

So how do you satisfy the two very common and seemingly opposing objectives – the desire to continue to live where you are comfortable, connected and happy, whilst also having the ability to fund the lifestyle and retirement you really want?

There are some simple, effective and proven strategies we can utilise to generate the wealth you need to fund the lifestyle and retirement you want – and they all centre around the release of wealth which is trapped in the family home.  

The 7 Strategies

  • Strategy 1 - Subdivision and sale of your backyard: subject to the town planning controls applicable, people who live on large blocks of land with underutilised space can subdivide and on-sell a portion of their land, then contribute the realised profits into retirement savings. Subdivision is proving to be a growing trend in Metro Sydney, where an estimated 4,500 existing blocks were approved for subdivision in 2015 (Source: Sydney Morning Herald 2015).

  • Strategy 2 - Subdivision and sale of the existing family home, and construction of a secondary dwelling: following the same approach as Strategy 1, except this allows the homeowner to transition into a newly constructed dwelling on the subdivided land alongside or at the rear of the existing home.

  • Strategy 3 - Passive income through a secondary dwelling: construction of a secondary dwelling in the rear or side yard of the property, often referred to as a ‘granny flat’ is not only relatively cheap; the rental returns achievable in certain locations can also offer a great source of passive income now and throughout retirement.

  • Strategy 4 - Profit from the sale of your home to a property developer and ‘downsize’: for people living in areas whereby higher density housing is permitted, this simple and effective strategy enables the homeowner to sell their home to a property developer, utilise the proceeds of sale to purchase a new dwelling, then allocate residual profits towards retirement savings.

  • Strategy 5 - Profit from development of your own property: a great strategy for people who are keen to tackle development of their existing property, allowing them to generate profit from constructing multiple homes, townhouses or units as well as funding their new home.

  • Strategy 6 - Passive income through short-stay accommodation: a excellent tactic to generate additional income with little or no investment e.g. Airbnb.

  • Strategy 7 - Equity release utilising either innovative financial products or family finance arrangements: an option for asset-rich, cash-poor homeowners who want to release a portion of their home’s value to fund their retirement (importantly, this does not include reverse mortgage products which should only be considered as a last resort).

When executed correctly under the guidance of professional advice, the strategies outlined above can be applied to get you to where you really want to be in life.

Have you thought about where your current path is leading you?

If you need support identifying and capitalising on opportunities to improve your future, get in contact with the experienced, independent property advisers at Groundswell Property Consultants who can show you how. Your lifestyle depends on it.

Contact us today to book your complimentary property consultation.

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