Why Home Investment is great for People Planning for Retirement in the UK

Written by Posted On Thursday, 25 May 2017 02:05

Retirement can be a great phase of life when it is planned just right. Official figures show that the average age of retirees from the workforce is currently around 58 years and this number is only going to go up. This shows the importance of starting to consider your investment options that would impact positively on your lifestyle after work.

A good place to start is to have a retirement date in mind; a ballpark date is fine to serve as a guide to work with. Also, decide on how much income you need to have during your retirement years to cover your basic expenses and map out how much would be nice to have for a certain luxuries you want to indulge in as well, perhaps travelling or boat cruises. This exercise is usually an eye opener for some, showing that a more targeted investment is necessary to support their expected pensions in order to enjoy retirement. At this point, buying a home is a way to generate significant income.

If you are pals with money management gurus, you might have heard more than once how your home is not a good investment. In a way, this statement holds true. Because a stock index fund into which you put £200,000 has a greater chance of acquiring greater value over time than that of your home. Past records of stocks have shown returns of 9 – 10% yearly, compared with home prices at around 3%.

Why Should UK Retirees Invest in Property?

You are at a significant advantage because you are planning for retirement in the UK. Interestingly, the Best Property investment opportunities UK are enormous, and this is good news because a home is a wise investment. Buying a home force you to save money in the sense that, the money paid as rent is saved up instead. Even if only 20% of your first mortgage payment goes toward the principal, you would still be accruing a lot more equity as a home owner than as a renter.

In addition, because a home is generally bought with leveraged money, the 3% yearly price gains can be significantly magnified. Say for instance, you put down £30,000 down on a £150,000 home, and its value in five years grows to £165,000, you have a gain of £15000, which is 50% of your initial investment.

Finally, in two words, tax benefits. Realistically however, you can only enjoy tax benefits if you itemise deductions on your tax and they are also quite dependent on nuances by the government, on top of everything else. Say for example, you live in a high-brow area; you could deduct a significant amount from your tax each year by being able to deduct the mortgage interest on your expensive home.

Investment in property comes with risks as well as the possibility of rewards.

For more information visit here https://www.crowdlords.com/full-risk-disclosure

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CrowdLords

CrowdLords offer buy to let property & investment property in the UK. We help you raise the funds you need from our crowd of Investors. High income producing investments.

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