If you’re a retiree – or you are quickly approaching that point in your life – then you may be seeking ways of boosting your retirement income and / or wanting to get into an additional investment genre in order to help increase your asset base. One of the ways you might be thinking of accomplishing this is through investing in real estate.
But is this really a good idea?
In a word, yes…but your success with this endeavor will depend on several key factors.
Overall, a second career in investment real estate can not only offer retirees a method of increasing passive and ongoing income, but it can also provide you with a way to stay active and socially connected with others, such as your tenants, and any of the contractors that you work with to perform maintenance and / or management of your properties.
But, before you move full steam ahead, though, be sure that you are fully aware of any and all of your potential costs. These start with the purchase of your property (or properties) itself, which can require you to put down a large chunk of your savings as a down payment, and can also call for monthly mortgage payments. (While the monthly carrying costs should be covered by your rental income, you need to consider just how financially draining it could be if your property goes unoccupied – especially for several months in a row).
Added to that can be any of the monthly utilities that you pay for yourself, as well as insurance, and maintenance – both ongoing (such as landscaping) and one-time requirements such as when an item, system, or appliance needs to be repaired or replaced.
There is also the time requirement for managing your property. Marketing for and screening new tenants, collecting rent, and responding to maintenance calls will all go into this category – which for some, could be a deal breaker.
If you’re thinking about moving forward with investing in a rental property, but you don’t want to deal with the day to day management aspect, there is a solution. Working with a property management team can allow you to delegate the activities you don’t have time (or desire) for, while at the same time allowing you to take part in the income and equity-related real estate benefits. For more information on how you can profit by including a property manager on your investment team, give us a call today.