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Kirk Rice Blog

Alternative Ways To Invest In Bricks And MortarWritten on June 2, 2016 by Peter Sharratt

Alternative Ways To Invest In Bricks And Mortar

Whilst investing directly into property has always brought with it the potential rewards of capital growth and rental income, there are always risks too: buying the wrong property, failing to find a tenant, or worse still finding a tenant who doesn’t pay the rent or who does damage to the property.

Shares in Property

Real Estate Investment Trusts (REITs) are listed property companies that invest in and manage property investments on behalf of shareholders. REITs can be very tax efficient as the property company pays no corporation or capital gains tax on the profits from property investment. A number of UK authorised unit trusts and Open-Ended Investment Companies provide a straightforward and low-cost way to invest in a property portfolio managed by professional asset managers. There are also investment bonds that invest in both UK and overseas property and represent a tax-efficient way of getting exposure to the property market, and allow the holder to withdraw 5% of the bond each year without an immediate tax charge.

Pension Options

Many life insurance and pension companies have funds that invest directly in property and are available within a pension scheme. A Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS) can invest in commercial property, including business premises occupied by the pension fund beneficiary, meaning that the rental income is paid into the pension fund.

If you’re new to property, it pays to get good advice on which type of investment would work best for you.

The value of investments and income from them may go down. You may not get back the original amount invested.

Click here to view the May issue of our Property Market Review

Any reader interested in discussing this topic further can telephone Peter Sharratt on 01344 875000 or email peter.sharratt@kirkrice.co.uk

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