I regularly chat with
people who have money to invest to discuss how they could put this to work in
the property market. Whilst for some this forms part of a larger investment
portfolio, for many property has become an alternative to a private pension.
I believe there’s many
good reasons that people are making this choice. Here’s a few of them:
5) Accountability to yourself
Frankly I, and many
others, would rather keep their money where they can see it. I don’t like
giving it away to a faceless fund manager to play with (whilst paying them
fees, often regardless of performance).
I can touch my
properties, I know the market and can make an informed decision as to what
property I buy and how it is managed. It’s far easier to track how my
properties are performing rather than relying on a pension scheme to ride the
right waves to keep up with or outperform the market.
4) Short term income
Property can pay me
straight away. Yields in Chichester may only average four to five percent but
that’s far better than I can get from a savings account and eventually from an
annuity, whilst rent normally increases over time in line with inflation. Hargreaves
Lansdown suggest a 55 year old would now receive just 1.9%+inflation or 3.9%
fixed for life from their pension fund.
3) Long term investment returns
Property has
outperformed all the other main asset classes (which pension funds will track)
over the long-term. Monies invested in 1996 would have grown two decades later
by 292% in government bonds, 308% in the stock market, 479% in property and
1,305% in property leveraged with mortgage borrowing.
2) Flexibility
Owning property gives
flexibility as to whether you use some of the income or equity at any time you
need it, rather than it being locked away in a pension scheme with set rules as
to when you can access your money.
1) Benefits on death
This is the big one
for me and has really hit home as I wade through my late father’s financial
affairs. One of his pension
schemes has no death benefits, two others will half the monthly payment as a ‘widow’s
pension’ and another sees the lump sum payout that was due in nine months (his
65th Birthday) go up in smoke. He had only begun to benefit from one
of those four schemes due to his age. And these were pretty attractive ‘guaranteed’
private pension schemes - I hate to think of the stuff people are signing up to
now!
Property meanwhile
will continue to yield rental payments even on the owner’s death. And perhaps
more importantly, it can be passed down to the next generation, rather than
vanishing into the pension provider’s coffers instead.
If you think there
might be a better future for your money in property and you would like to discuss
your options whilst using my knowledge and experience of investing in the local
property market, please get in touch.
(This article was featured in the Chichester Observer's property section on 1st December 2016)
Clive Janes, CRJ Lettings.
www.crjlettings.co.uk
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If you are looking for an agent that is well-established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.
E-mail me on clive@crjlettings.co.uk or call 01243 624 599.
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Good article
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