Over the years many clients have told me they want to buy Properties as they see this as a “great investment” and it is fair to say that there are many examples whereby clients have been very well served by Property exposure and with an abundance of ex professional footballers organising seminars to tell us how easy it is, it has been a challenge to curb the enthusiasm for this investment.
To be clear, I am not against Property as an investment. We know that, relatively speaking, Property has performed well over the years although where I challenge my clients is their exposure to this asset class or perhaps put another way, the lack of exposure to other asset classes. If all of someone’s wealth is in Property then of course this carries similarity to holding one share for example – there’s an argument that you are over exposed.
The best of both worlds. A consideration would be owning commercial property within a Self-Invested Pension (SIPP) or indeed a Small Self-Administered Scheme (SSAS). These Pension plans can own commercial property and rather than just be exposed to exposed to this single asset class the Pension can of course invest in many other forms of investments including cash, fixed income and of course equities. In terms of tax efficiency this approach works incredibly well but like anything, there are of course pros and cons which need careful consideration before deciding.
If you are a business owner and perhaps currently lease your office, factory, retail unit etc and have the opportunity to buy this Property then give consideration to your Pension plan doing this for you. Please get in touch – paul@astute-financial.co.uk for more information.
