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How Can Property Prepare You for Retirement?

“The joy of retirement comes in those everyday pursuits that embrace the joy of life; to experience daily the freedom to invest one’s life-long knowledge for the betterment of others; and, to allocate time to pursuits that only received, in years of working, a fleeting moment.”Byron Pulsifer

Retirement is a new beginning where you get time to enjoy things you never had time to do when you were working. And to make this phase of your life comfortable and enjoyable, you need to plan beforehand about the retirement options and choices you will need to make.

Property and pension savings are considered as the two most popular choices for retirement. However, the way you invest dictates the type of retirement you will have.

Property investment as a retirement vehicle

Over the last 50 years, house prices in the UK have doubled every 8 to 10 years making property a lucrative option. If you consider other retirement income options against property investment, you will notice that property investment provides:

  • Opportunity for capital growth.
  • A steady stream of income.
  • A tangible and real legacy for your family. Profits can be enjoyed by future generations.

There is no limit to how much you can invest in a property. It all depends on what size portfolio you want to build which will suit your desired retirement lifestyle and how much capital you are prepared to spend.

Unlike pension savings, property investments give you an option of ‘leveraging’ where you invest with a buy-to-let mortgage. Property investment gives you flexibility as you should have ready access to your funds, i.e. rental payments. So, for instance, if you start investing when you are in your twenties, you can easily build a profitable property portfolio and reap benefits in your retirement phase of life.

Another advantage of property investment is that the income you receive from rent is likely (not a certainty) to rise each year thus protecting you to an extent from the rising cost of living. For instance, you buy a single-family house in a metropolitan area. This property would produce anywhere between 1% to 10% un-leveraged rental income yield. The rent on this property should keep up with inflation.

The verdict

Planning for the future is essential but like so many things in life, how a pension or investment performs can vary. Always take good financial and legal advice if you are considering your options.

If you’d like to liquidate the equity in your home before retirement, we can offer you a no fee home buying service. You can have the cash into your account in FIVE days, give us a try. Call us on 01903 331 599 or pop an email over to [email protected].

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About the author

Starting his career in Estate Agency, Jeff quickly moved up the ranks to manage his own office for Halifax Property Services. Co-founding Speed Property Buyers in 2008, he has applied this knowledge and overseen rapid expansion of the business.