Over recent years many people have invested in pension plans which have under-preformed and have fallen short of the expected incomes for their retirement. Over the past 15 years the Halifax house price index in the UK has soared by 147% while the FTSE all share has climbed by just 48%.
Gearing and borrowing is an important principle in buying property which cannot be applied in the same way with shares. A bank, for example, will lend you money to buy a £100,000 house, but the same bank will not lend you £100,000 to buy shares. The reason, property is an appreciating asset which can be sold to pay off the loan.
With property, and buy to lets in particular, the rental income that your investment properties produce should ideally be enough to cover the cost of financing, and the cost of managing and maintaining them. There are circumstances, where you might feel its ok to subsidise to take advantage of capital growth and a minimal investment.
Given the stable and steady increase in property price over the course of years, Property Investment provides a safe and secure way to increase your wealth base for retirement.
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5th June 08
Interest rate remain stable
The Bank of England maintains the interest rate at 5.0% today