Usin Property as part of your Retirement Plan

EdInvestor

dunstonh wrote: »

It is also worth noting that there will come a time when you have to repay the mortgage.

BTL mortgages can be rolled over pretty easily.

If you dont have the funds that means you will have to sell and there goes your rental income.

Of course the net proceeds are then invested to replace the rental income :rolleyes:

Plus, you will be subject to capital gains tax (if all has gone well) and the CGT changes this year have made long term taxation worse.

There are many ways of reducing CGT.One thing to consider is a 'dual purpose' property which could act as a retirement home for later and a BTL for now. There are big CGT breaks on any letting property that you have lived in yourself. This arrangment would also suit someone who planned to spend most of their time abroad in retirement but wanted a UK bolthole.

As far as returns go, property offers stable rental yield plus long term capital appreciation, while cash offers volatile yields and long term capital depreciation. The big disadvantage to property is its illiquidity of course. But it certainly has a place in any investment portfolio of suitable size.

setmefree2

dunstonh wrote: »

rental yields in the UK are typically around 5% before tax at the moment.

Jeepers - I hadn't realised that. Thus, mostly LL make money from the capital gains. Have yields always historically been as low as this?

setmefree2

EdInvestor wrote: »

As far as returns go, property offers stable rental yield plus long term capital appreciation, while cash offers volatile yields and long term capital depreciation. The big disadvantage to property is its illiquidity of course. But it certainly has a place in any investment portfolio of suitable size.

But would you buy, say, shares before a buy to let? because they are more liquid? Are the rental yields alone worth it?

Dithering_Dad

EdInvestor wrote: »

As far as returns go, property offers stable rental yield plus long term capital appreciation, while cash offers volatile yields and long term capital depreciation. The big disadvantage to property is its illiquidity of course. But it certainly has a place in any investment portfolio of suitable size.

Are you a BTL landlord Ed, or is this just something you advise other people to do?

MPD

EdInvestor wrote: »

There are big CGT breaks on any letting property that you have lived in yourself.

As I have to pay the CGT on a property in this situation that I disposed of last year I would be very interested in hearing more about this. I have some idea, but any clarification would be most helpful.