Skip to Content

Get a FREE assessment of your rental property. Start here!

Get a FREE assessment of your rental property. Start here!

How Do Real Estate Investments Affect Your Retirement?

Retired Portsmouth Investor Doing Personal FinancesThere are a variety of methods to save for your retirement. Each carries varying degrees of risk, and the rate of return you can expect also varies widely. For investors seeking a solution to grow their retirement fund instantly without the high risk of the stock market, the Portsmouth rental real estate market offers the best of both worlds. For the past two decades, more and more investors have switched to rental real estate to gain these benefits. Real estate investments may affect your retirement differently depending on how close you are to retirement age and your financial goals. In this article, we will talk about closely how investing in rental real estate can potentially affect your plans.

Ongoing Income

One of the initial things that new rental real estate investors visualize when starting in property ownership is rental income. Investing in real estate is often considered as a long-term investment strategy for the reason that the longer you hold and rent a property, the more likely those rental payments will help you build a lot of equity over time. Even short-term ownership can provide the benefit of a monthly rental income that compensates for all of the expenses of owning and managing your property if your calculations are accurate. Numerous investors want to sell their investment properties when they retire, but this is unnecessary. If you organize everything carefully, you could use that monthly rental income to help sustain you in your retirement years.

High Potential Return

Another way to build your retirement fund is to purchase one or more bargain properties to rent and, eventually, to sell. It’s common sense that the less you pay for the property upfront, the higher your potential returns will be months and even years down the road. The demand for rental homes is expected to remain strong for several years, making rental real estate one of the safest and highest-earning investments imaginable. Also, if your investment fails to fulfill your ambitions for whatever circumstances, it is typically feasible to sell and recoup your initial investment plus benefit from any appreciation that has taken place in the market.

What Inflation?

Different from cash, bonds, and other passive investments, rental real estate automatically adjusts for inflation. This implies that the value of the property you bought five, ten, or even twenty years ago will increase together with the rising cost of everything else. Few other investments with strong stability have this unique advantage. As rental rates and your property values increase, your mortgage payment and other costs will remain fixed, increasing your profit margin every year. The longer you hold your investment property, the higher your profits are going to be. This can help you build real wealth to spend in your retirement days in a remarkably short amount of time.

Avoid the Downsides

One of the big reasons that more people don’t invest in rental real estate as part of their retirement plan is because owning a rental house can be a hassle if improperly handled. Many individuals purchase their first investment property thinking they can keep more money in their funds if they manage it themselves. But numerous new Portsmouth landlords underestimate just how hands-on owning rental real estate can be. Unlike buying stocks or bonds, rental real estate is not a truly passive investment. No matter how long you own your properties, there will always be ongoing maintenance and tenant relations to manage.

 

One of the best techniques to invest in rental real estate for retirement is to employ a respected name in rental property management to avoid potential drawbacks. At Real Property Management Hampton Roads, we cooperate with rental property investors to ensure that your property is as profitable as it can be monthly, and we also help you increase your property values and accomplish your retirement goals. To learn more about what we have to offer rental property investors like you, call us at 757-395-4274 today!

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.