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By Brittany Fisher
Are you a senior thinking about investing in real estate? Are you interested in generating increased cash flow, or looking for more opportunities to stay active and engaged? Perhaps house-flipping is something you always wanted to try your hand at, but never had time for. You’ll be happy to know that real estate in general is an excellent second career choice for seniors.
Real estate agents who are over fifty tend to be quite successful in their field, due to their extensive real-life experience with people, as well as with everything that goes into buying and selling a home. And many seniors are choosing to invest in real estate, to ensure a steady cash flow after retirement. If you’re wondering if real estate investment is right for you, here are some answers to questions you may have.
No, you don’t need to be a licensed agent (but it might help).
You can buy rental or investment properties, and flip houses without being a licensed real estate agent. So if you feel you’d rather not spend time completing the real estate coursework and studying for the state exam, you can bypass this step. The costs of the training and the licensing are not prohibitive, but if you are trying to be frugal while getting your start, this might be an additional motivation for you to skip this step. Nevertheless, if you have the time and the resources, getting licensed as an agent might help you succeed with your investments. For one thing, you won’t have to pay real estate commissions on your sales. For another, the courses will help you better understand the ins and outs of real estate law.
You will probably need to take out a loan – so, check your credit score.
Unless you are going into real estate investment with quite a bit of disposable capital, you will probably need to get a loan to make your first purchase. And this will not be easy if you don’t have great credit. So check your credit, first of all. You are entitled to one free credit report per year, from each of the three reporting companies, so there’s no cost involved. If it turns out that your credit score is too low, there are ways you can improve it. Be sure to pay all your bills on time, for one thing, and if you have outstanding debt, see what you can do to reduce it.
No, you probably can’t successfully flip just any house.
You need to understand the housing market and be aware of which locations are likely to be good for investment. Neighborhoods where employment is on the rise and crime rates are low are probably good choices for buying affordably and selling at a profit. Be aware of environmental and infrastructure issues that could affect property value, too. You also need to make smart investments when it comes to the actual structures you purchase. Don’t go for homes that need major renovation, such as roof replacement or new wiring. Homes with mold are also best avoided. Invest in a house that can be made attractive and comfortable without excessive repairs.
Be prepared to think like a business owner.
Even if you aren’t planning on hiring employees to help manage properties, it’s important to approach what you’re doing with the discipline and responsibility of a business owner. This means careful money management, an organized schedule, and professional interactions with potential clients. If you do opt to hire workers to help with property maintenance or rental management, be professional and organized in your dealings with them, too. This is especially crucial when it comes to payroll. Using automated payroll services will help you stay on schedule, classify your employees accurately, and calculate and file taxes correctly.
Maybe you want to make real estate investment a new full-time career, or maybe you just want to try it out and see if it’s for you. Either way, seniors interested in learning more about taking the plunge into real estate investment should check out Old Dawg’s REI Network, which offers many great resources and can connect you with other seniors who are getting into real estate in their retirement years.
