Emma Parsons-Reid has used property investment to help her to an early semi-retirement – she was able to quit full time work two decades before the official pension age.
Back in 2003, Emma was a single mother with a teenage daughter. Buying a £85,000 two bedroom house in Michaelston, west Cardiff, was a struggle on her civil service salary and she certainly didn’t have money left over to pay significant sums into her work pension.
In 2006, Emma, now 57, remarried and the following year she moved in with her husband, who owned a four bedroom house in the same area. Rather than sell her terrace she rented it out, using the income to pay down her mortgage and living on her wages.
“I overpaid every month, as much as Nationwide allowed,” she said.
By the time Emma was 47, the mortgage on the terrace was paid off and her daughter, now 34, was grown up.
“I decided I didn’t want to be in the rat race any more, I had had enough,” said Emma.
She quit her job and began to live on the rental income from her property – currently £850pcm.
“It was bliss,” she said. “I didn’t want to wait until I was 67 to get my state pension; I was actually quite angry about having to wait that long. I have elderly parents and five grandchildren and I wanted to spend my time with them.”
With no housing costs to cover – her husband has paid off the mortgage on their house – her rental income has provided a comfortable living for Emma, who also takes on some part time work on an ad hoc basis when the mood takes her.
“I had little cleaning company for a while, but it became so successful that I had to stop,” she said. “I could have been a slave to it every single day and that was not what I wanted.”
Emma’s finances were boosted further when she turned 55 and was able to cash in her modest £15,000 pension pot. She has opted to put this money, plus her savings, into income bonds, which earn her around £550pcm in interest.
Her terrace, meanwhile, has more than doubled in value since she has owned it, meaning she has the option of remortgaging or selling up if she ever needs a lump sum.
“Property not as lucrative as it used to be with all the tax changes, but if you have not got a mortgage it is still great,” she said.
