Rise of the Grandlords

They’re wise, they’re inconspicuous and they know how to swipe a bargain. These steely eyed retirees are gathering strength and showing up at property auctions around Scotland to outbid and outmanoeuvre other bidders as we witness the rise of the Grandlords. With the recent global financial crisis taking its toll on pensions and savings, retirees have begun to look at other ways to finance their golden years. As a result, property auctions across Scotland are reporting more property investors over the age of 65 aka ‘Grandlords’ now snapping up properties that they can rent out to boost their retirement income. They might not be the stereotypical image of a sleek property investor but these cash rich investors come to auction already fulfilling the very basic criteria to snap up a bargain and get on the buy-to-let property ladder. They’re not relying on 100% mortgages, are not striving to put a deposit together and often have the advantage of being deposit ready on more than one property. You typically require a 20-30% deposit on a buy-to-let property to secure a competitive mortgage rate and at auction you need to put down 10% on auction day with the balance being paid within 28 days albeit some auctions have a 14-day deadline. With bills still to be paid and a pension that doesn’t quite cut it, it’s easy to see the attraction of becoming a Grandlord (or indeed a ‘Grandlady’), especially if you’re living in what’s effectively a nest of cash from which the kids have long since flown. For many it’s a no brainer and the perfect financial solution. Scott Fraser of McEwan Fraser Investments says: "A number of years ago it was possible to put in a bid at auction and then swiftly arrange a mortgage, but not any more. It’s no surprise therefore that the older generation are now better placed to bid at auction as they typically have more savings or equity in their own property. We work with a number of older clients who can now enjoy a more secure financial retirement thanks to smart property investment. But buying at auction is not without risk, and novice buy-to-let investors should tread carefully.”