Real Estate Investment for Retirement Income

September 6, 2022by Sterling Homes0

For most people, life can be simplified into two stages: career and retirement. But while we’ve been told that retirement is the ultimate goal, the thought of approaching retirement age can be daunting as well.

This commonly has to do with money-related retirement concerns. However, the good news is that these worries don’t have to linger. To beat down the thought of financial dependence, you’ll need to make intelligent investments.

For this, a real estate is an investment option you should seriously consider.

However, a few steps in the right direction of your real estate investment can help calm your mind and establish a smart financial strategy for retirement. Including real estate in your retirement plan might consist of:

  • Owning a rental property

Rental real estate can be another vehicle for creating substantial passive income in retirement. Rental income accruing from real estate investment serves as a “salary” to retirees and is often a very dependable form of cash flow to cover their utility bills, insurance premiums, health plans, entertainment, travel, etc

As you earn more yields, you add to your portfolio by buying more properties repeating the process. With proper planning, you’ll have several properties generating income for you in retirement.

More so, in addition, rent prices generally rise over time alongside inflation, so you get more passive income if you aren’t planning to sell the property anytime soon.

  • Flip properties for profit

Flipping properties is a risky proposition that can be a good strategy when the market is hot. The flip involves buying a property, fixing it up, and then selling it at a profit. Property investors can even flip homes after leaving their day job, as a post-retirement part-time business for fun and extra money.

  • Contributing to a real estate fund

Instead of buying and renting or selling the property yourself, you can look for including real estate in your retirement plan by investing in a fund.

Real estate does not always mean investing in a plot or a flat. With the introduction of innovative realty instruments such as Real Estate Investment Trusts (REITs) and fractional investment options, one can start with a small sum and increase it like a Systematic Investment Plan (SIP). Generally, these financial instruments tend to do well in times of inflation, just because of their ability to increase rents and then pass that income on to [shareholders]

Real estate investments require large amounts of capital and therefore it is advisable to start investing early towards retirement when one is rather free of family responsibilities

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