Over recent years, people’s attitudes to pensions have changed drastically. Only 44% of men working full time in the private sector now pay into a company pension, down from 59% in 1997. There is a similar story for women with only 39% saving through company pensions, down from 44%15 years ago. With the declining value of pensions, and the rising cost of rent, bricks and mortar are becoming an attractive alternative investment to a pension.

According to the specialist buy-to-let mortgage provider BM Solutions, 80% of landlords view letting out property as a supplementary source of income to their pension, with 60% planning to live off their rental income.

When you look at the current state of pensions, you can hardly wonder why people are looking for and alternative investment for their retirement. Low interest on savings and a drop in annuity rates means that over the past year these traditional sources of retirement income have taken a hit. The past 12 months has also seen the average annuity income drop from £5,900 in 2011 to £4,900 in 2012. In contrast to this the rental yield a landlord can expect to earn from letting out their property stood at 6.7% over the past 3 months, and has been comfortably over 5% for the past year.

So if you were thinking of investing in a buy-to-let property, choosing the right location is key for your investment. For example, a recent report from Savill and Rightmove found that the London boroughs of Newham, Greenwich, Tower Hamlets, Islington, City of London, Southwark and Hackney, are forecast to deliver net total annual returns of more than 8.5% over the next 10 years. The best areas to invest in are generally within close proximity to a town or city centre, with good transport links and high levels of employment. This will appeal to high quality tenants such as young professionals.

However, there are some issues you must consider before investing your retirement into a buy-to-let property. If demand for rental property drops, you may have periods with no tenants. If faced with this situation, you must make sure that you will be able to cover the costs of your mortgage. Although you will be retired and hopefully living a much more relaxed lifestyle, being a landlord comes with responsibilities and you are obliged to meet certain requirements for your tenants. You will have to prove the safety of your property and may be required to produce Gas Safe, Energy Performance and Portable Appliance Testing (PAT) documents.If you would rather go without this hassle and fully relish your new lifestyle, using estate agents may be something to consider.

When becoming a buy-to-let landlord, there are a few steps you can make to increase your chances of making a good profit. It will involve spending some time calculating your estimated rental income and making sure that this will cover all of the outgoings that come with a buy-to-let property. Getting as much advice before hand will be extremely beneficial. Go to local estate agents and enquire about rental incomes in your area. There are also many property investment companies that can help you invest in the right property.