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Published on April 12th, 2015 | by richard

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The Quick Guide to Investing in a Property for Retirement

Many people buy property as an investment for retirement, either as security for their home or an extra income stream. Renting out a property or even a portfolio of properties is an excellent way to boost your retirement income and to start saving before you retire. But buying the right property isn’t always easy, and nor is finding the money to start you off. You first need to decide whether you want to purchase a retirement property to live in or if you want to rent it out to other people to support you in your home. If you want to buy property for your retirement, follow this guide to financing and managing it.

Investment or Home?

If you’re interested in owning property for your retirement, you should decide if it’s a home or just an investment. If you purchase a house to rent to others, you might choose to continue letting it when you retire, or you might sell it on. But if you want to buy a home that you can live in when you retire and rent it out beforehand, you will have to think about it carefully. A retirement property might not be the best thing to put on the market.

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Brandon Blahnik

Funding the Property

If you want to buy a property, whether it’s for you to live in or rent out, you need to be able to pay for it. If you’re planning to sell your current home and downsize, that’s quite a simple way to fulfill your needs. But perhaps you want to buy an investment property that will add to your retirement savings and eventually your retirement income. One option for buying property to let is through a buy-to-let mortgage. However, some people choose to do it using their pensions. In Australia, you can use a type of pension fund called a self-managed super fund to borrow money and buy property. Blueprint Wealth are the leading SMSF advisors in Perth and they can explain exactly how the process works. In the UK, you can hold buy-to-let properties in your personal pension if you choose the right fund.

Finding the Right Property

If you want to invest in a rental property for your retirement, you need to make sure you choose the right one. It would be a mistake to jump into owning a buy-to-let property without first researching the market and finding out how to maximise your profit. Looking for a property you can rent is very different to buying your own home. You need to think from the perspective of a renter and do plenty of research to make sure you make a sound investment.

Looking after your rental property is something you need to think about too. You have certain responsibilities as the landlord, so you need to make plans for how you’ll fulfill them. You can hand the task to an estate agent, but you’ll need to weigh the cost against your income.


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