Renting properties is "not like saving for a pension", expert advises

Prospective landlords must realise that entering the rental market is like "starting a small business", according to an industry expert speaking to London Housing News.

With news that the number of employees in the UK contributing towards a pension has dropped from 46 to 38 per cent - compounded by the fact that confidence in the financial market has decreased - it's no surprise that many people are looking for other ways to provide for their future.

It is commonly thought that one such way to do this is to join the property rentals arena. David Salusbury, chairman of the National Landlords Association (NLA), accepts that private lets can offer a sold, long-term investment for those who are thinking about making plans for their retirement.

However, he warns that it's not any easy undertaking.

"Potential landlords must realise that letting a property is a lot more complicated than contributing to a pension," he said. "Becoming a landlord is like starting any other small business.

"Anyone considering using property to bolster their pension plans must make sure that they put together a long-term business plan, taking account of the various regulations governing the letting of property, as well as their responsibility to tenants." 

Salsubury's comments coincide with the publication of a survey by the NLA, which revealed landlords' increasing reliance on their rental properties as a means of boosting their pension, This Is Cornwall reports. 

81 per cent of the landlords questioned said they expected to rely on the rent gleaned from their properties to "help them financially after they stop working."

Posted 20-02-2012
Author: Elizabeth Smythe