Work-life balance through property


Most of us regard work-life balance as something of a holy grail; we’re on a continuous quest for it, we know it’s there, but somehow it continues to elude us. Few people realise it’s often how you make your income and what you do with it that is the key to achieving balance.

That’s why bricks and mortar is such an attractive investment. Property can create income and growth passively. Investment properties can produce 4-5 per cent rental returns and 7-10 per cent capital growth over the long term, but you only need to put in a few hours per month to manage it. Not many other jobs can do that! Having a few investment properties often creates more wealth for a person than they could ever achieve from a lifetime of saving, even if they are high-salary earners.

Earning a salary from a typical nine-to-five job gives you money to live day to day, but as soon as you stop work, so does your income. They key to being able to create real work-life balance, or to be able to take a career break, is to leverage and invest your income while you’re earning and to put it into something that will create passive income or lump-sum cash in the future.

The reason why many people shy away from property investing is the amount of debt and risk involved. Successful investors understand the true pros and cons of investing and learn to develop good risk management strategies. Good strategies include holding large cash buffers or fixing rates. It’s true that borrowing is risky for the first few years of an investment, but as soon as your property generates equity, the equity can pay for the rest of the debt.

Many people retire with all their wealth saved in one family home – not money they have saved from a salaried job. Doesn’t it make sense to buy more now, while you’re still earning, and use your increased wealth to enjoy life now rather than wait 30 years to pay off your home and have a holiday?

If you buy well in the first place, your property should grow in the long term. With the additional equity, you can:

  • pay the difference between the rent and mortgage, so you don’t have to support your investments with your wages
  • reinvest in more appreciating assets
  • take a well-earned rest, extended maternity leave, or work part-time
  • afford the odd luxury you couldn’t previously afford on your wages.

Investing is a serious business involving large amounts of money so make sure you do your research and then check your strategy with a qualified accountant, mortgage broker and financial planner, all of which should be property investors too. If they make money from investing themselves, they should be better placed to help you do the same.

Chris Gray is a leading property expert who hosts “Your Money Your Call” on Sky Business News.