Considering buying property for your retirement?
If you are considering this, then being a shrewd investor will help you reach your goals quicker, with less risk and the best returns. Some investors are lazy and can’t be bothered to research where they are buying. This is a big mistake. Wherever possible always visit the area and view any property that you are interested in. Ask questions challenge the sourcer (or us) to prove it is a good deal.
We have a case study of a Doctor who wants to build up a property portfolio that is affordable. Looking to provide for a decent retirement fund. Sensibly he is looking at this as along term investment. His criteria is to buy North East property in the £50,000to £60,000 bracket.
A minimum yield of 7%,with a decent discount to the market price is also a requirement. Taking an interest only mortgage over this period he will, with good management have a decent monthly cash surplus. He plans to look at his position on an annual basis and to pay down the mortgage with any surplus funds. His strategy is to repeat this process by buying another property every two to three years.
When near to retirement he can either sell and buy a higher yield property. Or he could continue to take the income from his properties which will have little or no mortgages outstanding. We say take the latter route.
Conclusion: We consider such an investor to be shrewd and realistic. By buying at the right price in a good area with a decent cash-flow he has set the foundations for his retirement. By doing his research he now has a very sensible long term plan. Because he has acted early he could well be retiring much earlier than he thought possible.