Investment Property Consults when considering investment property opportunities, have the yield that the property will produce at the top of the list of priorities. This is at odds of previous philosophy of many property companies that properties are to be flipped or sold to make money from the investment property. The “ grey pound” is now a considerable presence in the buy to let and investment property sector and for those looking to supplement their income in retirement the yield is of the utmost importance. The capital appreciation is normally not guaranteed and should be deemed as a bonus rather than the main feature of investment property
This has come at a time of pensions revolution, where there have been reports of a 48% drop in the number of those retiring using their savings to buy an income for life. In official figures released this year, George Osborne announced that the radical changes had seen 46,368 savers convert their pension pot into an annuity in the period between march and may this year, compared to 89,896 for the same period last year.
As interest rates remain low, buying an investment property is as an alternative to an annuity is becoming increasingly attractive and popular and the grey pound is a significant market in this sector. Research from insurer LV revealing that one in 12 of those over the age of 60 now owns a second home. The restrictions imposed on residential mortgages have not affected buy to let mortgages and the cost of buy to let mortgages has also fallen. At the same time that rents have been achieving higher prices and excellent levels of occupancy have been attained making investment property a very attractive asset.
So for those looking at buying an investment property for retirement what are the best options?
Some investors will look at property within a close radius of their homes but this whilst perhaps giving peace of mind may not give the best returns. Also in retirement many are planning on actively enjoying their retirement with travel hobbies etc and may not want to be actively involved in the day to day running of the property. There are a number of “hands off ” passive investments that satisfy both these points including fully managed residential properties and also the popular purpose built student accommodation. These now can offer a range of features including assured rentals or rental guarantees and contracted buy back options normally with an uplift. To maximise the benefit and returns from these properties, those looking at buying an investment property should look at leaving their money in the investment property for 5-10 years . Investment property Consults have considerable experience in assisting those buying investment property in selecting the right property but also on tactical asset management and are happy to assist those beginning to invest or expanding existing property portfolios.