Is Rental Property a Good Retirement Investment?


While many people look forward to their retirement, not everyone will be able to receive a pension and/or might not have enough saved up to live on for an extended period of time. Although it may seem a bit daunting to consider retirement funds and planning, it is extremely important to ensure your financial stability for your retirement.   

If you don’t have a pension plan included in your employment contract, you may want to consider that carefully planned financial management of a rental property can be an excellent investment strategy that will support you during your retirement. 

What Are the Pros?  

Renting out your property will most likely be able to bring financial returns which outperform an average person’s pension. However, you need to carefully pay attention to any changes in taxation laws and stamp duty to make sure you know exactly what your tax responsibilities are. 

Despite the fact that returns on initial property investment are often much more significant than the average pension, using a rental property for retirement does indeed come with its own increased risks and can incur more taxing. While on the other hand, pensions are a generally more tax efficient way of saving for retirement, the returns of a pension are much lower as the average pension in the UK is around £50,000. 

One of the best benefits of owning a property is that you can cash in your money at any time, whereas pension schemes will likely charge you if you want your funds ahead of time. With property, you can also rent it out, which would ensure a consistent monthly income, as well from rent payments every month.  

What Are the Cons?  

As with all facets of life, things to not always go according to our plans and we may have to face deaths, divorces, and fluctuations of the housing market – to name a few. These types of events often have significant financial repercussions, but we have to remember that there aren’t any guarantees with pension plans either. People will make bad investments and companies will go out of business – either of these unfortunate circumstances could ruin workplace pensions or personal savings at any time.  

Despite not having any guarantees, renting out a property usually will at least cover its own mortgage payments and with the right planning and timing, its capital growth will most likely outperform the average pension.  

How Can We Help 

At ZFA, we advise property investment as a simple method to diversify if you’re having some worries about the future of your pension or retirement savings.  

As with everything, it is of the utmost importance to make your financial decisions very carefully and thoughtfully, with the advice of trusted professionals. At ZFA, your peace of mind is our priority. We recommend either supplementing pension savings with letting out property or investing in multiple properties in multiple locations in order to minimise any risk involved.  

If you’re interested in protecting your hard-earned retirement, chat to one of our friendly knowledgeable employees – we can help you with a range of services, from guaranteed rent and property management, estate agency and property investment to commercial letting.  

Do you want to sell your house? Contact us today if you have any questions and we’ll take care of the rest. 

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  • Testimonials

    I have been working with ZFA for 4 years and they manage my full portfolio. I don't need to worry about a thing, they manage every aspect of my properties - highly recommended.

    Mr Stephen Jones