Are you looking forward to a day where work becomes optional? Most people considering the jump into retirement often question if they have enough savings so that their money doesn’t run out before they do! Without a doubt, transitioning from saver to spender is a significant psychological shift – living without a consistent income stream can be scary and uncomfortable. If you find yourself apprehensive about retirement, considering diversifying into real estate might help you take the leap.
Things to Consider Before Buying a Rental Property for Retirement
Full disclosure, it takes a certain amount of research, capital, skills, and intuition to invest in real estate. If you are dedicated, and you do it right, real estate can be a promising investment for the long term.
Research – Before you do anything, find a realtor that specializes in securing high cash flow investments and can do the research for you. At Jordan Bennett & Associates, we have access to exclusive real estate investment opportunities as a result of our vast investor network and relationships. We provide market rent analyses, comprehensive reviews of investment property expenses, and pro forma analyses, all to help you determine what cash flow you could expect.
Available Capital – Unless you plan to purchase your income property with cash, you may want to consider buying a home before you stop working. A mortgage approval could be more difficult to obtain without an income.
Skills and Connections – Do you know a handyman than can give you a deal on his services? Or do you plan to do the repairs yourself? Do you plan on personally responding to tenant requests or will you hire a property manager? All of these questions depend on your preference as landlord, as well as how much rental income you want to keep for yourself.
Intuition – Avoid the mistake of confusing intuition with enthusiasm. Yes, real estate is exciting, but success in the industry requires you to make informed choices. Take stock of your resources, skills, connections and knowledge before diving head first into a shallow pool.
Stay tuned for the second part of this blog, where we’ll discuss the elements of a good investment purchase as well as the Pro’s and Con’s of using real estate income to fund your retirement.
We would love to chat with you if you think your retirement portfolio is missing the income (and adventure!) that real estate investing can provide. Contact our team to learn more about our investing services!