When planning for retirement, many people rely on conventional methods like investing in the stock market or keeping a large amount of money in a savings account. While this can provide an adequate retirement for some, relying on these methods isn't usually the best option. Adding real estate investment to your retirement portfolio helps diversify the assets you hold, and renting out your properties will help provide you with a reliable source of income while you're no longer working. If you're nearing retirement or just planning for the far future, read on to learn three reasons why buying investment properties is a good idea to prepare for retirement.
1. Monthly Rental Income Continues Throughout Retirement
Renting out investment properties gives you a monthly income throughout the duration of your retirement, which makes real estate a valuable asset. Conventional retirement assets like stocks or a savings account will slowly deplete over your retirement as you draw upon them. Rental income, on the other hand, keeps going as long as you're able to find tenants for your investment properties. Investing in real estate is a way to guard against running out of savings during your retirement since it provides a reliable income source.
2. Property Management Companies Free You From Having to Manage Rentals Yourself
When people are planning for retirement, they may avoid investing in real estate and renting out properties because they feel that it will take up too much of their time. However, this doesn't need to be the case. Property management companies will rent out your properties for you and keep them in good condition. You'll have the rental income deposited into your account without the need to involve yourself personally in managing and maintaining your properties. While property management companies charge a fee in return for renting out your homes, using them to manage your investment properties frees you up to enjoy your retirement.
3. You Can Sell Your Investments When You Need a Large Amount of Funds
When you invest in real estate, you always have the option of selling the homes that you own when you need extra cash. Real estate isn't a very liquid investment, since it can take some time to sell your home. If you need to pay large medical bills or raise money to retire overseas, however, selling the investment properties that you own can give you access to a large influx of cash that you can use.
Overall, it's a good idea to seriously consider investing in real estate as part of your retirement strategy. Renting out your properties gives you a consistent source of income to help replace the salary that you lose during retirement, and you can always sell the homes if you need to raise a large amount of cash. If you're nearing retirement and wondering how to prepare yourself financially, look at investment properties for sale in neighborhoods that are growing — these are a good investment that will be easy to rent out to tenants.
Contact a local seller to get help finding investment properties for sale.