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Option Homes Ltd - News- Turning Your Pension into Property – Part 1

Turning Your Pension into Property – Part 1

Date Added 10/04/2016

Last year we saw the introduction of some new rules regarding how we use our pensions, with the main takeaway being that we have more control over how we manage our money. For a lot of retired folks, this means the opportunity to invest in some buy-to-let property.

There can be a great reward for utilising your retirement funds in this way, as the properties you buy may have the chance to increase in value over time, not to mention the extra cash that comes in via the rents you charge. There some cons to those pros though and it`s crucial that anyone thinking of doing this does their homework and understands everything about the market they are entering.

Take Advice and Your Time

Never rush into anything like this, especially when you`re playing with your pension pot. Once it has been diminished it can be difficult to restore so make sure you have taken lots of good advice and have done all your calculations to ensure you are making the right decision. Once you have weighed up the situation and have come to the decision that moving into the property market is right for you, then there are a few things you need to make sure you get right.

Firstly, you need to find the right kind of property in the right area. Obviously you will be attracted by prices when it comes to buying, but your main priority should be the area. Make sure it`s one that people want to live in and use a residential research service (or several) to find out how much rents are going for in similar properties and then match that up with the mortgage repayments for the new property. You`ll also want to figure out what your target market is; as in, what kind of tenants are you going to be attracting to the property.

Know What Kind of Tenants You Want

Potential tenants might be students who will stick around for a year or so and probably won`t take great care of the property, or young professionals who will take better care of the property but may require a superior standard of décor and housing accessories to students. A bigger property might attract a family who may stay for a long time and be reliable, but may also place great demands on you to maintain the property.

Depending on what kind of landlord duties you intend to carry out yourself, choosing which kind of tenants you want to rent to can be extremely important. We will talk about your responsibilities as a landlord in greater detail in Part 2.
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