Do you really want to a landlord after you retire?

A successful retirement has much more to do with bringing in an ample amount of income than it does with having a large net worth. So, if you own residential rental homes or units, you may be considering using the incoming cash flow from them to fill in any of the income “gaps” you may have between other sources – like Social Security and/or a pension – and your living expenses when you retire.

There are actually a number of advantages to going this route – especially if you have built up a significant amount of equity in your real estate investment(s), you keep the operating expenses low, and you raise the amount of rent over time.

Some of the primary plusses may include:

  • Ongoing income / cash flow
  • Returns that are adjusted for inflation
  • Increased equity (and net worth)
  • More predictable returns (especially compared to the unpredictable and volatile stock market)
  • Tax advantages (such as deductions for various expenses)

That being said there are also some items to consider before opting to remain a real estate investor in retirement. For instance, there are typically some ongoing costs, such as a mortgage payment (if applicable), as well as insurance and repairs.

Real estate is also fairly illiquid, so if you need cash fast for other purposes, it can be difficult to obtain it from real property versus withdrawing funds from a bank or brokerage account. For those investors who also take on landlording duties, there can be a big time commitment, too.

If you’re generating a nice cash flow from your rental property(ies) after you retire, but you no longer want the hassle of rent collection, property maintenance, and responding to tenant emergencies, you could have the “best of both worlds” by hiring a professional property manager to take over these time-consuming tasks – while at the same time still receiving rental income.

Give us a call if you own residential rentals in Orlando and/or the surrounding Central Florida area and we’ll show you how you can hang on to your property without spending your retirement days working on it.