Property Investment
2 min read
Author: Andrew Nicol
Founder, 20+ Years' Experience Investing In Property, Author & Host
What if you could hop in a time machine and buy an investment property 5, 10, or even 20 years ago?
How much extra money could you make?
While I haven’t invented a (working) DeLorean … I have built you this new tool that gets you close.
You put in the month and year you were born … where you live … and it shows you what would have happened if you bought the average property earlier.
Including how much money you could have made.
Let’s say you’re 35 today.
If you bought the median NZ property, you would have made:
Now, in this example, we’re not looking at rental cashflow. We’re just looking at the house price going up.
And we’re assuming that your property perfectly follows the market (it won’t in practice).
But, let me be clear – I’m not trying to say that you wasted time when you were a foetus and that you should have bought property back then.
Instead, it’s a way of getting across the tried-and-true principle that generally, the earlier you invest, the more money you tend to make.
Want to see what it looks like for you?
Cost of Waiting Calculator: Figure out how much wealth you could have built if you invested earlier.
Keep in mind that buying earlier doesn’t always make substantially more money.
Play around with the tool, and you'll find plenty of exceptions.
Say you were born in 1990 and invested in Gisborne.
There’s only a $10k-or-so difference between the wealth you'd have today if you'd bought at 20 or waited until you were 25.
So, you could easily look at that and think: “Well, waiting five years didn't matter much.”
And you’re right. Those 5 years didn’t make much of a difference.
But what if I saw that, then decided to wait another 5 years?
Suddenly, those 5 years made a $340,000 difference in the wealth you’d have.
That's the problem with trying to pick the perfect time to invest.
You don't know beforehand which five years will matter most.
House prices don't rise neatly every year. They can boom, fall off a cliff, then hover for years.
So, sometimes waiting five years won't cost you much at all.
Other times, those five years could contain most of the growth.
And you don’t know which one was which until after the fact.
The point isn't to look backwards and kick yourself for not buying earlier.
And like I said, I haven't invented a DeLorean that can take you back to your 20th birthday to buy a house.
It’s just to show that the earlier you invest, the longer you’ll generally be in the market.
The longer you’re invested, the more money you tend to make.
That's what this new tool shows.
Founder, 20+ Years' Experience Investing In Property, Author & Host
Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.
This article is for your general information. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.
We’ve made every effort to make sure the information is accurate. But we occasionally get the odd fact wrong. Make sure you do your own research or talk to a financial adviser before making any investment decisions.
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