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This contributed post is for informational purposes only. Please consult a financial and real estate professional before making any decisions.
Preparing for retirement is essential if you want to live comfortably while you’re no longer working, or even afford to stop working at all. As people are living longer, many are worrying about whether they’re going to be adequately prepared for retirement. At the same time, many people are also struggling to save and invest anything for their retirement. If you’re currently thinking about how to be ready for when the time comes, investing in real estate might be one thing you’re considering. Firstly, there’s getting on the property ladder so you can have your own home, then there’s the option of buying a property purely for investment. But is this a good idea?
Buying Your Own Home
When it comes to buying your own home, most people agree that it’s a good move for retirement. If you can get your mortgage paid off before you retire, you won’t need to pay any rent or mortgage payments, which is great news for your expenses. However, there is the issue of having to pay for costs related to your home, such as homeowner’s insurance and any necessary repairs. If you’re looking for a home that’s also a good investment, call Buyer’s Corner Realty to discuss your wishes. Some people argue that renting your home is better than owning, but when it’s time for you to retire, you might wish that all that rent money could have been invested somewhere else. When you retire with your own home, you can even downsize and pocket the extra cash.
Going Beyond Your Home
If you want to go further than just owning your own home, many people invest in a second property. This could be anything from a duplex, another residential home, or even a vacation home or commercial property. These can be a source of income now and when you retire, you can either sell or keep them. On the other hand, they might not make you much money now, but if you can at least break even, you’ll have an asset you can benefit from when you’re ready to retire. If you do decide to get a second property, you’ll need to think about the effort it will take to maintain it, the costs, and your responsibilities as a landlord or vacation home host. Plus, you need to think hard about the property market and how it might change.
Property Portfolio vs Flipping
If you want to invest in property for your retirement, you could build a portfolio of property to rent out, or you could consider flipping property. If you want to try the latter, you’ll need to rely on changing property prices or on being able to buy and renovate a property for less than you can resell it for. This can work fantastically in some places but not so well in others. For a property portfolio, you either need to be willing to dedicate a lot of your time to it or find a service you trust to manage everything. As you approach retirement, you’ll need to think about whether your properties are going to support you with regular income or whether it’s time to sell.
Property can be a good investment for your retirement. However, you need to know what you’re doing, especially if you’re thinking beyond simply owning your home.