“Being a landlord might still pay better than a pension” - that was the arresting headline in The Telegraph that caught our attention recently.
Pensions have certainly been squeezed, with workplace pension pots shrinking and inflation eating into returns. Meanwhile, buy-to-let is regularly portrayed in the press as no longer viable, despite research from Hamptons revealing that the average rental yield of 6% is 50% higher than the 4% of pensions.
So who and what do you listen to if you want to start planning for your future?
There’s no replacement for hearing things straight from the horse’s mouth, so we’ve gathered some thoughts from our landlords on why they choose buy-to-let. We’ve also included some useful facts that don’t always make the headlines so you can see what feels right for you.
This week’s blog doesn’t constitute financial advice, and you should speak to an expert before choosing a pension or investment. But if you’re on the fence about becoming a landlord or whether to expand or offload your lettings portfolio, we hope you find some clarity to start 2023.
It’s no secret that rents are soaring, with rises of 20% and more in some areas last year accompanied by record-high demand. For several reasons, the rental market is unlikely to cool down any time soon because:
In short, the rental market needs more homes, and the door is wide open for private landlords to fill the gap. And when you provide high-quality accommodation, you can be sure of constant demand while generating the highest possible rent from the best tenants.
We’ve all seen how higher inflation can reduce the value of your savings. If you want to maintain a rewarding and comfortable lifestyle in later life, your money needs to keep working to stay ahead of the cost of living.
Some very basic things to remember about income in retirement include:
Many landlords view a private pension and buy-to-let as the perfect combination. They see their pension as the pot with its sturdy foundation, and their rental properties as the plant with no limits on how high or how long it can grow.
Long-term planning is essential for future financial freedom, but should that mean waiting until you retire to live the life you want? The debate rages over instant gratification versus long-term planning, but there’s no reason why you can’t have both with a mixed investment strategy.
For landlords, part of the attraction of buy-to-let is the direct control it gives them, while also providing a balance between planning for retirement and enjoying life now.
You can hardly move for stories gleefully announcing the collapse of buy-to-let as something that no longer works, so why are so many landlords still successful?
The answer is pretty simple, so let’s take a look beyond the headlines to understand the bigger picture.
Given all of the above, it’s perfectly possible to build a sustainable buy-to-let business of one or more homes that becomes more profitable over time.
Security is a massive consideration for retirement, and the standout feature of buy-to-let for many landlords is that property is a tangible asset that can’t simply disappear overnight, or ever.
Some of the factors that make rental property a secure investment include:
Whatever the sentiment and realities of the economy, rental homes are always in demand, which is probably why the phrase “as safe as houses” exists.
Could buy-to-let be right for your future?
With the turmoil of the last year or so, having all your eggs in one basket probably isn’t the answer when planning for your retirement.
There are so many options out there, and speaking to an expert is a great first step. So if you’d like to talk about making buy-to-let part of your strategy, call us on 01722 580059 or email us at info@piccoloproperty.co.uk for a chat about the rental market in the Wilton & Salisbury area and to see if it’s right for you.
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