Retirees cashing in on rising rental yields?
A growing number of older people could be considering becoming a landlord as a means to fund their retirement.
According to the Daily Telegraph, those in or approaching their retirement are increasingly turning to the buy-to-let sector as an alternative to conventional savings and investment products.
Due to the current difficulties involved in obtaining finance for a mortgage as well as the large costs for housing facing first-time buyers, many people are turning to rented accommodation instead.
This is having the effect of pushing up rental yields to record highs, while at the same time low interest rates and rising inflation has made many savings and investment products offer very little in way of return.
Therefore, buying a property to let our could prove a lucrative move for those looking for a way to fund their retirement.
The newspaper pointed to recent figures from the Council of Mortgage Lenders which show that buy-to-let loans increased by 21 per cent between April and July this year.
It claims that much of that increase was due to older owner-occupiers remortgaging their homes to invest in property.
One such investor was David Wright, a retired train driver, who paid £67,500 for a one-bedroom house at Ilkeston, Yorkshire.
Mr Wright calculated that the £4,500-plus income he would get each year by letting the property out was much better than alternative investments.
"The interest in a savings account doesn't compare to the seven per cent yield that I'm getting as a landlord. The decision was a no-brainer from the word go," he told the newspaper.
However, if you are thinking about renting out your house it is important to consider the many different steps and legal procedures that should be taken.
Getting help from property management services could be a wise move, as such organisations can aid with marketing your property, getting tenant references and dealing with contracts, as well as many other aspects of renting out a property.
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