How Real Estate Can Boost Your Retirement Income

By Ruth Jill

Having enough money for retirement is something we all think about a little bit more with each passing year. And, unfortunately, it’s becoming a little bit more of an issue for Americans. Data shows that by and large, Americans don’t have enough retirement savings — and a discouraging number of individuals have little saved at all.

This is a significant problem that will likely require some kind of government shift or sweeping societal change to reverse. But in the meantime, one way that some people are trying to get around it is by setting up retirement income that will supplement savings without requiring full-time work. This is easier discussed than actually accomplished, but there are numerous avenues — specifically in investment — that can in fact set you up with retirement income.

One example that stands out as an excellent option is real estate. It’s a form of investment that has long been profitable to those who practice with care and dedication.  It also offers the flexibility to serve as a supplemental, but not particularly burdensome aspect of retirement. Below, we’ll get into a few more specific reasons that this particular form of investment can help boost your retirement income.

Investing Without Experience

Investing without experience is generally inadvisable. And to be clear, we aren’t suggesting you invest without knowledge or preparation. However, one of the points presented in our recent podcast on making quick cash in real estate was that the average person can actually become wealthy in real estate without experience or much cash. Naturally, this still requires sound strategy and attentive practice, as well as a bit of luck. But the point, in part, is that there’s very little barrier to entry in real estate as compared to other investment markets. And, this alone, makes it a great potential boost to retirement income. It’s simply more feasible to get into successful real estate investment than to take the time to learn more complex or exclusive investment strategies.

Diversification

Arguably,  the main way that real estate investment can boost your retirement income is by diversifying whatever portfolio you may already have. The general idea behind diversification is that the more investments you have — provided they’re strategic and not too high-risk — the more likely it is that your net movement is positive. So, expanding your retirement investment efforts to include a whole new category like real estate is likely to increase your odds at producing reliable and meaningful income into your retirement years. Factor in that it’s also fairly rare to suffer significant losses in real estate, and this can be a particularly savvy method of diversification.

Managing Your Own Business

Another way to boost your retirement income through real estate is to actually make a business out of it, rather than just invest more passively. While this sounds awfully involved at first, the entire point is that this kind of venture can essentially operate however you want it to, with as little or as great a commitment as you prefer. As stated in one piece on how to start a real estate business, “An added benefit… is that you set your own hours. You decide when, where, and how the meetings and sales take place.” With your own business set up, you can acquire, manage, and sell properties as you please, and generate income when you need to, without being accountable to any larger company or job requirements. You may even have some fun doing it.

Stock-Style Investment

If managing a business isn’t what you have in mind, but you also don’t want to merely sit on real estate the way you might in a diversification strategy, it’s also important to note that you can earn retirement income by investing in property more or less the way you might invest in stock. One guide to why real estate is critical to a portfolio does a nice job of explaining how this works through funds known as REITs. If you’re not familiar, this stands for “real estate investment trusts,” and they are effectively companies that manage real estate but “are required to pay out a certain portion of profits as dividends.” Essentially, you can buy and sell REITs as a means of capitalizing on the related companies’ real estate dealings (though many also choose to buy and hold REITs for the long term as well).

Through all of these methods, real estate investment can set you up to earn steady and reliable income into your retirement years.

exclusively written for OldDawgsReiNetwork.com by Ruth Jill