With life expectancy getting longer, it’s being said more and more often that one of the biggest fears on the minds of retirees today is running out of income before they run out of time. This is easy to understand – especially as it is not uncommon these days for retirement to last for 20 or more years.
Given the volatility in the stock market, the uncertainty of Social Security, and the fact that many people just simply haven’t saved nearly enough – what are people’s options when looking ahead for providing a long-term, ongoing retirement income?
One solid answer could be rental property.
Although being a landlord isn’t for everyone, there are a number of key benefits that come with owning investment property – starting with the regular stream of cash flow that it can provide. In fact, by purchasing the right property at the right price, a rental property could even produce more income for you than many of the more “traditional” passive investments.
In determining whether or not going this route is really the right move for you, though, there are a few factors to consider prior to moving forward. For example, first, if you need to secure a mortgage on the property, you will have to do so prior to leaving the steady income from your employer. This is because a lender will typically require that you have a steady income in order to qualify, as well as at least two years of employment history.
Also, if the property isn’t going to be your primary residence, the lender may require that you make a down payment of more than 20% (if you’re not paying all cash for the investment). So, be sure that you have ample funds that can be moved over for this purpose.
You’ll also need to make sure that you’re going to net out what you need in terms of monthly income after any expenses on the property. For instance, even if you pay all cash for the purchase, you will still have costs such as insurance and maintenance.
If all of the details seem to work out – and provided that the property is in a viable location – then this could be a good option for you to consider.
If you do decide to move forward, but you don’t want the worry with the day to day property management duties, we can help. This way, you can still reap the benefits of your investment, without the need to be “on call” for your tenants’ needs.
For more information on how you could increase your retirement income through rental property, yet without having to become a full-time landlord, contact us – its what we do.