If you can cope with the chaos you could live in your pension

If you can cope with the chaos you could live in your pension

Over the last thirty years nothing has done better than property as an investment. Finding yourself short of a pension in later life, it may also be a good bet to keep you financially secure; the only leap in the dark is selling your home. There are always properties for sale that need help, anything from a decoration job to a complete rebuild. And there’s always a margin in the price that could provide you with a profit. It’s really a question of finding what’s right for you.

Starting from scratch, here are a few tips. Decide which area you want to work in first of all. Then set yourself a budget and get your team in place.

You’ll need a good estate agent; each area has a number who deal in development properties, so ask around, look at for sale boards on likely projects, it wont be long before you have a short list to visit. Find yourself the basic tradesmen or a small family builder – the longer established the better.

Get the legals in place early on. A good lawyer can save your life, so choose carefully. Most family lawyers have a property department, and as they tend to be local, have their ears to the ground when it comes to all the pitfalls.

Tell all of them exactly what you want to achieve, and your timescale. Most of all, listen to their advice.

Planning out the costs

Putting this small group of contacts together won’t cost you a penny, but it will give you the ability to hit the ground running when the right opportunity comes up.

The more you plan the simpler it will be. Then start off by picking something small and safe. A tired but sound flat or house should not need more than decoration, a new kitchen and bathroom to complete, but may not provide the kind of profit to interest the bigger developers. You have an additional advantage – you get to live in your investment. And when you sell, the profit you make is tax-free. If it’s your primary home you can do this once every 18 months without attracting capital gains.

Then do your sums, include absolutely everything. If a project looks likely to make a profit, decide if you’d still go ahead to make half as much. Only then, move ahead. If you’ve enough from the sale of your property to do the whole thing, you’re in control. If you need extra funding, (even if you think you possibly might), now is the time to talk to the bank, or an independent financial adviser. Get what you need in writing, it’s a parachute!

Think your too old for a mortgage, take a look at this post. Using your property portfolio as your pension is a wise choice.

Image by Ryan Riggins / Unsplash