Many over-50s landlords are reaping the financial rewards of their buy-to-let investments, new research from Saga Landlord Insurance.
Around one in ten of the so-called grandlords are now taking advantage of the opportunities property rental offers and those considering entering the buy-to-let market have reason to feel optimistic, Saga says.
The research found that on average over 50s estimate that they make almost £700 profit a month from letting a property.
A third of respondents became “grandlords” in the last five years and while some people think being a landlord is tougher than they had expected (24 per cent), one in ten said they found it easier than they thought they would. This may be because only 45 per cent actually bought the property with the specific purpose of renting it out as one in seven (14 per cent) inherited the property and one in 14 (7 per cent) purchased it for a child or grandchild to live in.
While a number of older property investors are enjoying healthy returns, there are challenges to being a landlord as well. Success is not guaranteed as one in ten (10 per cent) of those polled said they were just breaking even or making a loss.
Grandlording does cause some day-to-day worries. The top concerns are renting the property out to bad tenants (36 per cent) and managing the property as you get older (19 per cent). And perhaps people are right to have some worries as a previous Saga survey showed that a third (32 per cent) had experienced problems with tenants paying rent, a quarter (27 per cent) had experienced damage to the property and one in ten (11 per cent) had needed to take legal action against tenants.
While Saga Landlord Insurance addresses some of these concerns, it has also produced a guide to help people who are landlords or are thinking of becoming one. The guide offers top tips on deciding whether grandlording is right for you, how to pick good tenants and when it is the right time to increase tenants rent.
Sue Green, Head of Landlord and Home Insurance, Saga says:
“Buy-to-let is an increasingly popular investment for the over 50s, particularly in the current financial climate but clearly it is not without challenges. The recently announced cuts to tax relief for buy-to-let landlords, for example, are a new factor that people will have to take into account when deciding whether to start letting a property.”
“Our research shows that, while landlords are largely positive about their decision, they are also likely to face practical and financial hurdles. This is why we have developed a guide that provides practical advice to grandlords, helping to address the most commonly raised concerns and giving them peace of mind so they can focus on enjoying their retirement.”
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