How to Set Up Retirement Through Property In Five Years

A property investment is a commonly-used asset that can help deliver multiple income streams over the long term to achieve financial goals. Designed to deliver freedom and security through passive income. The following plan is just one example of how to set up retirement through property in five years.

Initially, you’ll invest up to £50,000 in a property and apply for a mortgage on the remaining amount, allowing you to expand capital through natural market growth whilst also creating a source of passive income post-mortgage term.

Year 1

Invest up to £50,000 into an Off-Plan property worth up to £200,000. If the market remains stable, you could potentially start seeing capital growth as your property increases in value during the build period. Off-plan properties are often priced between 10% and 15% below market value, allowing you to invest in a brand-new home for less money. This, therefore, gives you the opportunity to make a bigger potential rental revenue.

Year 2

In year 2 of the 5-year plan to set up retirement through property investment, you can look to invest in a second property, expanding your portfolio. This would require a second deposit – £50,000 in our example – invested into a second Off-Plan property. Both your first and second properties should begin creating capital growth during their respective build periods. It is critical to assess the performance of the properties on a regular basis with an investment adviser to guarantee you are receiving a high return to help support your overall goals.

Year 3

At this point you’ll begin paying the mortgage repayments on your first property after completion. Your rental income should equal around 125% of the mortgage repayments – meaning if you’re paying off £15,000 a year, your rental income should be at least £18,750. You will also invest into a third property as before, steadily building an Off-Plan portfolio that will have staggered completions.

Year 4

The repayments on any properties bought earlier in the plan will be covered by rental income while each property also looks to accrue capital growth. During Year 4 you will invest in your fourth property, once again investing £50,000. By this point in the plan, it’s feasible that the deposit could be raised purely from income raised by previous properties.

An investment consultant can help you to source the right investment for you each time, the right type of investment is key to building a diversified portfolio – this will help to minimise the risk within each investment and achieve early retirement in 5 years through property investment.

Year 5

CONGRATULATIONS YOU’RE HERE! This will be the final year of investment where you purchase your fifth property. In just five years, you’ll have built the foundations for a strong retirement plan based on both rental income and natural market growth, ready to be passed on or sold for further profit. Provided you follow the plan and advice of a consultant your investments may significantly increase in value, which will provide an easy exit strategy –  if you choose to sell an investment for the equity. This will be generated from investing off-plan with properties that are around 15% below market value until completion, and in prime location hotspots that will be in high demand once up for sale. In just 5 steps you have now learnt how to set up retirement through property investment in 5 years!

How To Retire Through Property Investment in 5 Years – The Variables To Consider

Of course, there are other variables to consider with each investment, in order to build a lucrative portfolio to support your growth strategy. If it is your first investment, you must decide which investment type is appropriate for you, such as a Buy-To-Let or a Student Investment. Furthermore, as mentioned, the location of any investment is critical. To command a premium rental income, your investment must have a premium position, such as a city centre or a waterfront view. Having a diverse portfolio that can withstand economic volatility can allow you to reach your retirement goal sooner.