Saving for retirement has always been an important life goal, but now more than ever, it’s something that should be at the forefront of saving plans. Current events have exposed the vulnerabilities of the traditional job market and highlighted the reasons people should seek to be financially independent. Investing in real estate is a great way to do so with options, flexibility, and opportunity for even novice investors. Here’s what you need to know about funding your retirement through real estate.
Why fund your retirement through real estate?
There are several ways to earn your way to retirement, but real estate is one of the most lucrative. The end goal is to achieve a consistent passive income, one in which no active work is required on your part. With real estate, your investment works for you. It works in your favor both in the face of inflation and appreciation. As rental prices and home values increase, your mortgage payment will stay the same, thus increasing your profits. Real estate also offers you flexible options and several tax benefits.
Ways to invest in real estate
So, you want to fund your retirement through real estate, but what are your options? One of the best parts of real estate investing is the wide variety of investment strategies you can choose from. Here are a few of the most popular.
Long term rentals
This is what people typically think about when it comes to real estate investing. With this route, you buy a residential property and seek out tenants to stay for an extended period.
- Potential for high return on investment
- Consistent cash flow
- Deduct interest, taxes, insurances, and property expenses
- Finding the right tenants
- Significant upfront capital to purchase residential property
Short term rentals
Think Airbnb, VRBO, and vacation rentals. Short-term rentals are a very lucrative investment strategy.
- More control over when you rent and to whom
- High return on investment
- Easier to keep up with maintenance if you’re visiting the home frequently to prepare for next guests
- Potentially a limited time window to rent out
- Hiring someone for upkeep if you don’t live close
Fix & Flip
An HGTV dream come true! Fixer-uppers are a popular investment strategy, especially for those with handyman skills. When you buy a distressed property to flip, you can either sell for a profit or hold to use as a rental.
- High return on investment
- Option to sell for profit or rent out
- If you have the skills, you can do many of the renovations yourself.
- Very involved work, not passive income during renovations
- If you don’t do renovations yourself, it could be costly to hire contractors
- No immediate profits
- Riskier investment (with a higher reward)
Intro to Real Estate
The first step to funding your retirement through real estate investing is getting the proper real estate investing education. A comprehensive understanding of your investment options and knowing how to set yourself up for success effectively. We are a team of everyday people who have come to know firsthand the freedom and possibilities that come with real estate investing, and we want to share what we know. Click here to find out more about our real estate investing education opportunities.
We use real-life investing scenarios to effectively equip our students with the tools they need to succeed. If you are ready to invest in your future, start by investing in your education. Click here to contact us today.