Can You Be Too Old To Invest In Property & Be A Landlord?

Can you be too old to invest in property?

I appreciate that everyone’s situation is different, especially in regards to health and personal finances, so that’s why I don’t believe there is a one size fits all solution, regardless of age. I don’t believe there is a hard and fast rule to property investing in relation to age.

Ultimately, investing in property can be perfect or reckless for anyone at any age. That’s my key point, and I’ve believed that for the longest time.

Why it made sense for my 65 year old dad to invest in property

So, allow me to walk through the reasons for why I believe it made sense for my dad to invest in property and become a landlord. Perhaps you’ll be able to relate and tick the same boxes.

• First and foremost, I personally believe property is the best investment; it trumps everything else because of its reliability in producing a good return.
• Even after investing in property, he would still have an ample amount of cash remaining in his savings accounts, so he wouldn’t be going “all in”, so to speak.
• He had enough cash to buy the property outright (i.e. he wouldn’t be exposing himself to mortgage debt).
• Investing in property has been an excellent hedge against inflation. What I mean by that is, history has shown that his money will work harder being invested in property as opposed to being left in a bank account. In short, fiat currency (e.g. the pound sterling) loses value over time due to inflation, whereas property has always go up in value in the long-term.
• He doesn’t need access to the money. At least for the foreseeable future.
• The money he allocates to investing is intended to be distributed to his family in his will eventually, so putting some of it in property seems like a sensible way to preserve and strategically diversify his wealth (again, this ties in with fighting inflation).
• Last but not least, the regular rental income would help comfortably support his living expenses (in combination with his pension).

Essentially, they were the primary and glaringly obvious reasons for why it made sense for my dad – as a pensioner – to allocate some of his money to invest in property. Of course, there were counter arguments and concerns, the primary being “cash is king”

The potential drawbacks of investing in property at an older age

• The biggest barrier to investing in property at an old age is the limited access to finance. So unless you have the cash to buy outright, it might be a non-starter.

  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.

• Property is largely considered a long-term investment strategy, so that means investing in property increases in risk with age. My biggest concern is that property prices can fluctuate, so in the short-term your property may be worth less than what you paid for it. For the lack of better words, you may not have enough time to wait for prices to bounce back.

  Arguably, this isn’t much of an issue if:

  • You don’t plan on selling
  • You have no mortgage debt

  However, it’s a factor definitely worth bearing in mind.

• Not exactly directly related to property investment, but stress is definitely an important factor to consider. Buying property and managing tenants can be stressful at any age. Nightmare tenants can be soul-destroying. Dear lord, I can attest to that.

  So I’d seriously consider whether taking on further responsibility during the times we’re supposed to be enjoying life is something you really want to do.

  Despite popular belief, being a landlord is not a passive past-time. That’s what they want you to believe, but from my experience [of nearly two decades in the trenches], that’s certainly not the case. Yes, using a property management service can alleviate some of the pain, from the day-to-day operations to keeping on top of the ever-changing legislations, but there’s nothing that will stop you from feeling the wrath of a tenant that is adamant on stepping out of line, because that’s going to hit you directly in the pocket.

• Property isn’t a particularly liquid asset, which means you won’t be able to easily convert your investment into cash if you need to do it quickly. Selling property can take time.

Want to learn more about investing in property and becoming a landlord?

Regardless of your age, if you want to learn more to help understand whether or not investing in property is a path you want to pursue, you may want to download my FREE guide for new landlords. It covers a lot of ground, particularly the management side of things, which can help you better understand what happens after you buy a rental property (which can definitely sway your decision on whether investing in property is right for you).

If you’re currently going through the process or contemplating it, I’d love to hear your story. Drop a comment…