LONDON, May 28, 2015 /PRNewswire/ --
Now that retirees can access their pension funds as cash, many are looking at BTL as a way to get the most from their pension savings.
Good returns, a history of strong performance and tangibility make property an attractive investment, particularly compared with the volatility of the stock market and low returns on savings. Property specialist Leaders highlights the top 5 benefits of investing a pension in property:
BTL provides a regular monthly income whilst also achieving capital growth. Longer-term house price growth is around six per cent per year, and in most good BTL areas, rental yields of five per cent or more are achievable.
Benefits not offered by annuities
Annuity rates are at an all-time low - around four per cent - and when you buy an annuity you give up any further growth from your pension, whereas investing in property gives you both a rental income and the opportunity to grow your capital. Unlike an annuity, an investment in property is not limited to an individual's lifetime and can be passed on for generations to come.
Save on fees to maximise your pension pot
Many pension funds charge significant fees for managing your investments, even when they perform badly, further reducing the value of your pension pot. Investing in property enables you to make more of your pension pot and avoid eroding fees.
Borrow to boost your investment potential
Most BTL mortgages are done on an interest-only basis which is tax efficient, as you can offset mortgage interest payments against your income tax bill. Whilst your rental income coves your mortgage payments, you benefit from capital growth across the full value of the property, often giving you a higher capital return than on a cash only purchase.
Limit the risks
No investment is risk-free, but with BTL you can limit the risks. You can use a letting expert to guide you on where and what to buy for maximum return, find you a reliable tenant, take care of your property and ensure you comply with the law. Specialist landlord insurance can cover you for rent arrears, damage to you property and legal fees giving you invaluable peace of mind so you can enjoy your retirement to the full.