Since you are currently enjoying your retirement, you’re most likely in a place where you need to closely protect your assets, but you’re also looking to build your wealth through your investments.
The investment properties you choose should be focused on producing solid cash flow now and should also be in markets that will provide stable income and growth through appreciation, since you cannot afford to add risk to your portfolio.
While there are several different ways to fund investment properties, for retirees, it makes the most sense to pay for these properties in full with cash. This means that you’ll maximize your income immediately because the rent collected will go straight to your pocket, not to paying off a mortgage. This can be a promising way to build a new stream of income during your retirement.
When you first entered the workforce, you were able to invest aggressively on investments that came with a higher risk but simultaneously had the potential for higher gains. But since you are in retirement, it is important to take a more conservative strategy and to choose investments that are as stable as possible while still providing you with desired returns.
Much like you would choose a portfolio of stocks that are conservative, choosing real estate is quite similar. Instead of purchasing properties that are in risky neighborhoods with a potential for higher profits in the future, it is a better choice to purchase properties that are in stable neighborhoods with less risk right now.
As you can see in the graph above, your initial investment of $546K has grown to over $635K in just ten years. By investing in real estate, you own a tangible asset that is appreciating in value as the years go by and generating generational wealth. Your portfolio is diversified and typically safer in your retirement, which is an ideal place to be.
Since you purchased your investment properties in full, you maximize the cash flow generated through rents. You own these properties free and clear, and there is no mortgage to pay off. This means you carry less risk, and profits are high. In fact, this real estate portfolio will generate an annual cash flow of over $48K at the ten-year mark, and that value will continue to increase in the future, as rent typically increases year-over-year.
Creating a Plan during your Retirement
Now that you’ve learned your real estate strategy that best fits your situation, it’s time to implement a plan. The key to successfully generate income in retirement through real estate investing is selecting the right markets, neighborhoods and properties that match your investment goals. Every investor has a unique situation and set of goals, but creating a plan can help you achieve your retirement goals.
HomeUnion can help. Our end-to-end solution makes it simple for investors to purchase single family real estate. We help you find, acquire, and manage investment properties, so you can invest in real estate hands-free.
How HomeUnion Works
1. MAKE THE DECISION
Be An Investor, Not a Landlord. Invest in single family rentals with HomeUnion.
2. DECIDE ON YOUR FINANCING
Is financing or cash best for your investment goals?
3. CHOOSE YOUR PROPERTIES
We will send you prevetted properties based on your personal investment goals.
4. ACQUIRE PROPERTIES
HomeUnion will do all the acquisition legwork for you, just approve the offers.
5. RELAX AS THE MONEY POURS IN
Watch the money roll in, as we take care of rehab, find good tenants, and fully manage your assets.