The fifth most common reason for moving home is planning for one's retirement. With low interest rates predicted to continue for some time, clients are looking for other ways of investing their monies as an alternative to other income streams.
Planning for the future is a key part of property ownership and buying a second home as an investment, with a view to retirement, is still an important part of the residential property market.
Buying a second home as a retirement investment strategy can be a wise financial move, offering both long-term benefits and immediate enjoyment. This approach involves purchasing an additional property, not as a primary residence, but as a means to generate income, benefit from property value appreciation, and provide a potential retirement living space.
Income Generation: Renting out the second home can provide a steady stream of passive income. This rental income can supplement retirement savings, helping to cover living expenses or fund other investments. It's important to consider location, as properties in high-demand areas or vacation destinations tend to yield higher rental incomes.
Property Appreciation: Real estate typically appreciates over time, making it a valuable asset for a retirement portfolio. By the time retirement comes, the property could be worth significantly more than the purchase price, offering a substantial return on investment when sold.
Retirement Living Option: The second home can serve as a future retirement residence, providing a paid-off home in a desirable location. This flexibility allows for a change in scenery or a downsizing option in retirement years.
Diversification: Investing in real estate diversifies a retirement portfolio, which is typically heavy in stocks and bonds. This diversification can reduce risk, as the real estate market often moves differently than the stock market.
A property buying agent can help identify key areas for such investments and help find off market properties in competitive areas.
There are however, on-going concerns that too many homes are being sold to and owned by people wanting a second home in some semi-rural and rural areas. Their obvious complaint is that second homes are infrequently occupied, the local economy suffers and it reduces available housing stock creating a housing shortage for locals.
There will always be traditional holiday destinations in North Cornwall, parts of the Devon coastline along the South Coast, the Suffolk Coast and in North Norfolk that remain popular for this, although, as with all property outside London, the market is very price sensitive.
People are understandably also considering their retirement and buyers look to invest in advance of giving up work. Historically, areas known for the milder climate on the south coast or in North Norfolk and on the Suffolk coastline are a few examples where there has always been a strong demand with buyers looking for retirement as well as second homes.
If you are looking to purchase an investment or retirement home in the coming months and need help finding a property within your price bracket, please contact Nigel Sellers on +44 (0) 1962 793100 or email: enquiries@premier-propertysearch.co.uk.
