Nowadays it can be hard to find a stable source of income when saving for your retirement fund. Yes there are retirement schemes for many businesses, but it is coming to light that it is becoming harder and harder to live on the funds left for retirement in today’s market. So what else can you do? Invest in your own retirement fund? Fill a large piggy bank full of coins on a rainy day? Or why not invest in in property for retirement?
Investing in property in order to prepare for your retirement has a number of benefits in comparison to opening a bank account solely to save for retirement. While savings accounts have widely been considered the most popular form of retirement preparation, in today’s constantly changing economy it has not always been proven as the safest method. So what are the main benefits of property investment as a means of saving for retirement?
A Stable Physical Investment
Whereas putting savings into a bank account may suffer from the latest interest rates, purchasing a property as an investment provides you with a stable physical investment that will not suffer if the banks ever start faltering. Following the saying of ‘never put all your eggs in one basket’ investing in a property as a means of saving for retirement will also give you a ‘back-up plan’ as such if your savings don’t end up amounting to much. This can be a big relief when it comes to the crunch time.
Stable Source of Income – Rent
Whether you choose to buy a furnished, completed property or you want to buy a fixer upper to furnish, renting out to tenants provides a stable source of investment and generates interest in the property should you ever choose to sell it. If you are buying property for renting purposes you’ll want to do your research on the local area, depending on the type of person you want to rent to.
For example, if you want to rent to young couples or families, you need to see which local schools are in the area, how far it is from the town, whether there is any public transport nearby and other aspects relating to their lives. If you don’t take these aspects into account, more often than not you will not attract the kinds of tenants you are looking for. Be aware that renting a property has its own ups and downs and can be a big responsibility, unless you delegate an estate agent to handle your property for you. It all depends on what you think you can handle.
Can be Easily Sold on.
Properties are in high demand nowadays, so if you have a well-furnished property in a nice area that is in good condition, chances are you’ll have a fair bit of interest for your property. If you purchased a fixer upper, you might even be able to make a profit on the property by selling it for a higher price than you bought it; it depends on when you plan to sell.
In a worst case scenario, if you are finding it hard to sell you can bump the price down a little or find an online buyer/seller who will buy your house at a discount in one easy payment. It is not an ideal situation but in ensures cash in hand without having to jump through several loops as you might have to with estate agents.
On the whole, property investment for retirement funds provides a nice stable investment to fall back on if your retirement savings end up looking a little lonely. At the end of the day, while we should be able to rely on our government to look after us past retirement, we cannot always be sure that we will get the funds needed and so preparing for the future while you still can might be a good idea. It is better to save now and spend later than to end up unable to look after yourself in the later years.
Article provided by chartered Silk Sharples Jennings – a chartered surveyors firm based in Shrewsbury. To see more of the areas covered, please see www.ssjsurveyors.co.uk.