Bricks & mortar never go out of fashion.
People will always need homes, which makes buying to let one of the safest investment strategies around. It’s also a smart way to build atax-efficient inheritance, something today’s young are becoming more reliant on than previous generations with the ever-widening gap between house prices and incomes.
Property has stood the test of time as a solid way to create wealth with an asset that’s forever in demand and can never disappear overnight. And while nobody can predict what lies ahead, there are steps you can take to accelerate your goals in life, plan a comfortable retirement, and give your children a valuable head-start.
So let’s take a look at how you can lay the foundations of a secure financial future for you and your family.
While true wealth creation happens over the longer term, it’s naturally more motivating when a plan includes some earlier rewards.
As the equity grows in your buy-to-let(s), you can use it to realise some of your life goals long before retirement. Owning rental property can help you:
The idea of sacrificing everything today for a better tomorrow is thrown around quite a lot, but it isn’t universally appealing. Fortunately, it’s perfectly possible to strike a balance of medium-term rewards and future financial freedom.
The average age of a first-time buyer has risen by 6 years since 2007 and now stands at 34. At the same time, Rightmove reports that a solo first-time buyer typically needs £74,402 to buy a home.
Higher education costs, escalating rents and soaring house prices have made it harder and harder to get onto the property ladder. Parents want to do what they can, and investing in buy-to-let can help you ease your children’s path as they step out into the world by:
While you never know what path your children will choose after they finish school, your buy-to-let business can help you make a positive contribution to the beginning of their journey.
Whether you choose to grow a lettings portfolio or stick at one buy-to-let, being a landlord can be a hassle-free and rewarding experience.
You can also use your lettings income to diversify into ISAs and pensions, or for dipping your toe into more adventurous territory like art, shares and crypto, all the while knowing that your property investment is safe.
Financial freedom, more than anything else, provides choices in life, but most incomes aren’t enough to retire in comfort. But with even a small portfolio of just 1 or 2 properties, buying to let can give you:
Right now, you may have no idea how you’ll wish to spend your retirement or how much money you’ll need. Will you want to live closer to your family, move to the seaside, or travel the oceans? Buying to let today can give you more security and options in later life.
A big concern for parents is that so much of what they leave to their children could get eaten up in tax. The current inheritance tax threshold is £300,000, with 40% payable on anything above that. While the rate has been frozen until 2026, it could increase after that.
With the right strategy in place, you can ensure that more of the estate from your buy-to-lets passes to your children.
By planning in advance with the help of an expert tax adviser, you can provide a solid financial footing for your children and a lasting legacy for future generations of your family.
For a real-life story of how one couple are building a buy-to-let portfolio to leave their children financially secure, take a look at this recent article in The Telegraph.
And if you’d like to talk about starting or growing your own buy-to-let business, why not get in touch? Call us on 01722 580059 or email us at firstname.lastname@example.org for some friendly and expert tips on how to pick the right rental property in the Wilton / Salisbury area and start designing your future.
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