Perhaps you have already heard a number of people complaining about the inadequacy of their pensions. In life, and particularly in current economic circumstances, financial guarantees are few and far between. The cost of rising cost of living and other unpredictable factors make it difficult to calculate exactly how much money you will need to fund your retirement without sacrificing your quality of life. Life doesn’t always happen as we plan and, later in life you could end up with unforeseen expenses such as medical bills. This is a troubling thought for many pensioners, but there is still hope!
Buy-to-let properties are becoming increasingly popular as investments and they have more than proven their worth. Instead of trying to build up a huge pension pot that might not supply you with the funds you need in the future, you’ll be investing in property. Sure, you will still invest in your regular pension but use any additional funds to purchase something more stable instead.
By investing in a property and renting it out, you will obtain an asset and enjoy a monthly income in the form of rent. Sure, you will owe on another mortgage but you will be earning an income by renting that property out. When you initially investigate a buy-to-let option, it is important to compare your estimated monthly repayments versus the amount of rent you will be able to charge. The two need to balance at least. So, the rent you receive should cover your monthly repayments. Otherwise, you will end up making contributions each month, and you won’t benefit from an additional income.
After you pay off your mortgage, the rent received will be yours to enjoy and use as you like! In addition, should you encounter an extreme emergency, you will have a secondary property that you can sell or apply for an equity release in order to gain instant access to money when you need it most. This additional property also allows you to provide your beneficiaries with even more than you could with one property alone. If you have two children, for example, you wouldn’t want them to fight over one property or be forced to sell and split the money. Instead, you can leave each of your children with a home of their own to do with as they please. It’s important to remember that any property is a financial investment, and you should take your time when making these kinds of decisions. Independent financial advice can help you explore all of your possible options and help you make an informed choice.
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