How Investing in Property Can Increase Your Retirement Fund

Olivia Hanlon

Many people are turning towards investing in property rather than saving in a pension pot. This is especially true for people who have a significant amount of savings and don’t want these simply collecting dust in a bank account. However, some people decide to invest in property whilst also having a pension pot and simultaneously get prepared for their retirement. Whatever option you choose, there are various benefits to investing in property to increase your retirement fund.

You’re able to start putting into a pension pot from the age of 22 or sooner if you wish to be enrolled as early as possible. However, while the return on pensions can be great if you’re on a regular salary, anyone who has extra cash may want to consider the other options that could end up more lucrative for them in the long-term. After all, when you retire, it would be ideal to have a monthly income you could depend on, and a property, for example, could provide this income for you. Alternatively, you could sell your investment when it comes to retiring and have a lump sum of money to travel with and enjoy. The choices are endless, but first, you have to decide what is best for you.

To help you get started deciding whether investing to increase your retirement fund is worth your time, we have listed some things to consider and how to be successful, ensuring you invest in the best places and get a huge return on your initial investment.

  • You can save monthly rent

If you invest in a buy to let opportunity, then you can use the monthly rental income to save up and add to your pension pot when you’re ready. You could potentially even create a private pension pot separate from your employer one where you can earn interest on your savings. For example, a lifetime ISA is available to those up to the age of 40 and gives individuals the chance to save up £4,000 a year and earn £1,000 interest bonus on this. Ultimately this means you could put your monthly rental income you’re acquiring from tenants into the ISA which will then be ready to withdraw when you retire. Plus, you will also have the ability to sell on or pass down the property you own and make even more money.

  • Research the best areas to invest for maximum returns

Anyone who is investing in property to increase their retirement fund will need to make sure they’re successful with multiple (or just one) investments so they can reap the financial rewards when they finally retire. Therefore, before investing in property, you must research the best places to invest that will allow your property to gain capital appreciation over time and end up being worth a lot more than you bought it for. Off-plan developments are ideal for investors who want properties for below-market value prices and still want to feel secure in their investment choice. RWinvest is a property company who specializes in both residential and student properties, and they recommend investors look towards the north-west of the UK for the most lucrative returns. Cities like Liverpool, Newcastle and Manchester are all in their recommendations for anyone struggling to decide on a city they want to put their money into through property.

  • Selling your property for maximum returns

If you’re savvy enough to have invested in an area and property that encounters high capital growth, then you will be able to sell it when you retire and have a sum lump to do whatever you wish with. In the next four years, it is predicted that property prices in the north-west (specifically) will increase by 24% so imagine how much more growth there will be between you investing now and then selling the property in one or two decades.

About Retire Early Lifestyle

Billy and Akaisha Kaderli retired three decades ago at the age of 38 and began traveling the world. As recognized retirement experts and internationally published authors on topics of finance and world travel, they have been interviewed about retirement issues by The Wall Street Journal, Kiplinger's Personal Finance Magazine, The Motley Fool Rule Your Retirement newsletter, nationally syndicated radio talk shows and countless newspapers and TV shows nationally and worldwide. They wrote the popular books The Adventurer's Guide to Early Retirement (Your Simple Path to FIRE) and Your Retirement Dream IS Possible.
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