The buy-to-let market: the perfect retirement plan
With the new ‘pension freedom’ rules that debuted earlier this year in April, thousands of people in their mid-fifties have invested in Buy-to-Let properties as a way to fund their retirement. With a typical Buy-to-let asset offering at least a five per-cent annual return, there is a booming number of landlords cashing in their lump sum pension funds in order to build an investment portfolio that will benefit not only their retirement, but also their family in the event of their death.
Why property is a more comfortable investment than stocks and shares
There is something to be said for the familiarity of investing in tangible, physical assets. Many feel more at home with bricks and mortar purchases rather than the nebulous value attached to stocks and shares, particularly when intending to use their yield to financially secure a comfortable retirement. Indeed, property investment offers an attractive combination of steady capital growth and a reliable secondary income stream, without the worry of a fluctuating market that appears unconnected to any effort expended by the investor. Even more so if there have been significant gains made on the family home, as the incremental increase in such an asset’s value is easily understood and recognised.
The flexibility of property as an investment
Unlike pension contributions that stop and start depending on circumstance, a Buy-to-Let investment, once funded, is a constant commitment. Nevertheless, unlike the more traditional stocks and shares investments, the capital tied up in property can be relatively quickly converted into cash. Not only that, but you can offset the maintenance costs of a rental property against tax and as part of a sensibly structured investment portfolio that makes the most of all tax breaks and benefits, property that has been purchased with the specific intention of providing a secondary stream of income can be a hugely reassuring asset.
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