Lazy Savings

13th Jun, 16 Lazy Savings

A common scenario these days, as we all live longer, is you retire, get a lump sum from your pension and they have that money “sitting” about.  In previous times you could get a good rate of return on your savings but for the last number of years interest rates have been hovering at between 0% & 1.5% – Ouch!

When talking to one of our clients they outlined this exact scenario.  They husband and wife had over £40,000 in an ISA in early 2011.  Never having invested in property and by their own admission being risk averse, meant they were not initially interested in investing.

However having got their ISA statement through in early 2012, showing the princely sum of £440 worth of interest for the year they came back to me for a 2nd look.

In indicated if we invested the £40,000 in Sittingbourne we could by a 2 up 2 down property (typical and popular in the area) in a highly desirable location with all the right fundamental’s (check out our blog article on fundamental’s by clicking here).  This would give them approximately the same return but rather than per year – per month!  In addition they would get the properties capital growth building up.  They decided to give it a go.

We purchased a 2 up 2 down property as promised for £140,000 in July 2012 using the £40,000 to cover associated costs and deposit (PIA do not take a fee for sourcing the property or overseeing the purchase).

They have happily collected the returns on this property since.  But what have they got in return?

  • As of January 2016 the property has been professional valued at £185,000 – a £45,000 capital gain.
  • They have just re-mortgaged this home again using the capital growth to purchase another property for rental.
  • They pay £394 a month in mortgage payments and receive £725 a month rent – A monthly profit of £331 (remember they made £400 for the whole year with the money in an ISA)
  • That rental income / profit has been doubled with the addition of the 2nd property purchased using the equity release from the first. They will now continue to benefit from equity growth on this property and the new property they have purchased.
  • No hassle rental – they have let PIA manage the property fully for them since purchase. We offer a great no nonsense service that is transparent to them and the tenant.

These guys are very happy as they now look to go into retirement shortly with not only their pensions but enough income from property rental to live comfortably, spoil their children and grand children, go on holiday and more!

In short they can maintain their working lifestyles into retirement without the stress of work!

Contact us today to talk about your unique experience and let us create an outline, similar to that above, for you.