Should you cash in your pension to become a York property landlord?

York property can bring great returns

Investing in York property can bring better returns

The main driver for investing in buy to let property in recent years has been the better returns which has prompted more investors turn to York property as a more profitable source of investment.

Part of the reason for this upturn is that interest rates on savings are low but rental property brings in a steady income – though the real profits come from capital increases from property price rises.

As we get nearer to the deadline in April, the issue for those aged over 55 being able to cash in their pension pot is becoming well-publicised.

That’s because the sweeping reforms could see lots of people withdrawing their lifetime savings and becoming buy to let (BTL) landlords in York.

York property – greater returns with price increases

There are many reasons for doing this, the main one is that property as an investment class has provided better returns than any other asset classes in recent years.

In addition, many potential buy to let investors are tempted by the regular income that the rent would bring.

The financial services market has already geared up to meet this huge leap in demand and there are now a record number of buy to let financial products available for those wanting to invest in rental property.

It should also be noted that the best BTL products are offering lower interest rates for those borrowers who have larger deposits to put down.

That means those with a pension pot could secure a very good BTL mortgage and buy York property and then install tenants.

Speak with York’s leading letting agent

However, as York’s leading letting agent we would recommend that you use the services we provide because becoming a landlord is not as straightforward and easy as many people believe.

For instance, there are a range of legal obligations that landlords now have to comply with and a letting agent will remove many of the issues that come with rental properties.

There’s no doubt that the capital gains that have occurred in house prices will be very tempting to many potential investors and lots of people will have been reading how amateur landlords have become very rich through buy to let.

The rental property sector is set to continue growing because there is lots of demand and restricted levels of housing supply which means that rents are slowly increasing, as are house prices.

Many experts are now predicting a buy to let boom as those with access to their pension pot decide to enjoy the profits that other landlords have been recording in recent years.

As with all financial commitments and investments, it’s always wise to take professional advice beforehand to ensure you are making the correct decision. Not complying with the rules and regulations about pension withdrawal could see a tax bill landing on your doorstep.

Rules about pension pot withdrawal

It’s important to remember that just the first 25% of the pension pot is going to be tax-free and the remainder will be taxed as personal income. This last point needs to be emphasised because some people may be pushed into a higher tax bracket if they do remove all of their pension savings.

However, we regularly stress in the Redmove blog just how time-consuming becoming a buy to let landlord can be so it’s imperative that you keep accurate records of the money you have spent to claim against your tax bill.

For many people simply investing their money into a buy to let property is all they want to do and then sit back and look to the returns they will enjoy.

There’s more to becoming a landlord than just that which is why we would recommend anyone thinking of withdrawing their pension pot to invest in property should think very carefully about taking on a letting agent.

What will a letting agent in York do?

Essentially, a letting agent will deal with many of the problems that may come with being a landlord and ensure that you fulfil your legal obligations.

These will range from fixing broken boilers, having a gas safety inspection carried out every year and dealing with complaints from neighbours about the tenant.

Don’t forget too that not every rental property has a tenant in all year round which means that you will have to endure voids, which is when there is no rent being paid, and additional costs such as repairs and replacing items such as broken furniture. You will need to redecorate regularly too.

While investing in buy to let property in York can be a very lucrative form of investment, we appreciate that being a landlord just isn’t for everyone.

Here at Redmove we are more than willing to share our experience and expertise to talk with you about whether you could become a successful rental property landlord.

Buy to let York property

Of course, we have a lot of clients who have come to us without any experience of being a landlord and who have made a successful business from their venture. We have helped them grow a property portfolio into a lucrative and rewarding business.

According to some financial industry experts, around 200,000 people may take advantage of the change in pension rules and will withdraw their entire pot to invest in property.

The financial investment firm Hargreaves Lansdown says that of those looking to withdraw cash, 16% will plump the money into property.

Among the reasons for the popularity of property is the level of yields, some areas can see yields of more than 10% in a year, though it helps that there is strong tenant demand.

In addition, landlords can offset mortgage interest as well as management and maintenance costs against tax.

Using a pension fund to buy rental property in York

Obviously, becoming a buy to let landlord also gives you more control over your money and investment though you should be aware that should you need the money quickly then you have to wait until the property can be sold.

Don’t forget too that once you have found a property and secured a BTL mortgage on it then you’ll need to find a letting agent that you can trust.

That’s where, if you are investing in property in York, a leading letting agent such as Redmove really is the right choice to make.

We like to believe that having a premium offering for landlords in York is a standard for us. Not everyone thinks the same.

Among our offering for landlords is a free video tour of the rental property and a mini website for the tenant and the landlord.

We also offer free floorplans and free rent protection should the tenant not pay their rent.

We could go on but our website details more on our offering – which really is hard to beat – and gives more details on how we provide an award winning service.

But don’t just take our word for it – check out our testimonials and have a look at Redmove TV to see what we have to offer.

Contact the experienced team at Redmove for more information on what we can do as the leading letting agent in York to help make your property investment a success on 01904 488444.


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