Investing in property for a pension!
Posted on Fri, Feb 17, 2012 @ 08:23 AM
A survey by the National Landlords Association (NLA) has found 81% of landlords expect to rely on their portfolio to help them financially after they stop working.
As confidence in the economy seems to be at an all time low, Landlords are becoming very precious when it comes to their property portfolio. They are seeing it as an important part of their rental income.
It also revealed that this came after a number of savers contributing to pensions dropped by 8% in the last 10 years – from 46% to 38% of all employees.
David Salusbury, Chairman, National Landlords Association, said:
“Landlord confidence in the financial market is at an all-time low. This
combined with record low interest rates means that many individuals are looking for alternative ways to secure their financial future.
“Private-residential property can be a sound long-term investment for those planning their retirement. But potential landlords must realise that letting property is a lot more complicated than contributing to a pension.”
At Martin & Co we believe that the potential to profit is worth the complications. With one investment you can gain in three ways.
1. Income is generated
Receiving income while saving for retirement - neat idea! or you could use thi
s income to help you gear up and create a much larger investment base to grow with, see section on gearing below.
2. Capital Growth
Our investment growing is what we all strive for and, even in today’s interesting times, property has a good chance of growing, especially if you are looking at retirement in the longer term.
3. Gearing
Gearing can really make a difference to your wealth. With property, the way you gear up is to take out a mortgage. As an example if you had £100,000 to invest (a pleasant thought indeed) you could buy one property worth £100,000 or you could us
e the £100,000 as a deposit on a property or a number of properties. If you were able to secure a 75% mortgage you could purchase £400,000 worth of property investment. If this £400,000 property grows by 5% you would gain £20,000 compared to £5,000 if you just purchased a £100,000 property.
Risk you may be thinking, yes most definitely and the number one risk is not receiving rent to pay your mortgage interest. This risk can be significantly reduced by using an excellent letting agent (that will find quality tenants quickly) and making sure you have a rent guarantee insurance/contract in place.
Want to secure your financial future by investing in property?
Make it as easy as possible and contact your local Martin & Co office and they'll be pleased to advise you about suitable properties to buy, rent you should be receiving and guide you through the do's and don'ts of property investment.
