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Few Americans will earn enough income during their lifetime to retire and live comfortably on a fixed income. Both younger and more older adults do have many options to begin planning as early as possible for their non-working lifestyles. There are 5 paths to a comfortable retirement with real estate that are explored on this page.
Ways to Build a Comfortable Retirement Income
1. Real Estate Investment Trusts
By the age of 30, many working-class adults have already started making contributions to a an IRA or 401k mutual fund or other managed investment. One of the most popular investments in the housing industry that is low risk is an REIT. These investments allow partial ownership of a commercial structure that is purchased to earn residual profits. REITs must payout 90% of the fund value to all investors annually as determined by federal law.
Earning cash on the actual sale of a property without taking ownership or supplying the money for the purchase is the concept of wholesaling in real estate. Wholesalers find motivated sellers of homes and connect these sellers with home buyers. A glorified finder's fee is how a person makes money in these transactions. While not every deal pays a lot of money, the work involved is minimal for a person who is building retirement dollars.
3. Turnkey Properties
Instead of flipping homes and trying to sell them, a large percentage of investors are taking the easy way out. Turnkey companies now exist to buy and sell renovated homes direct to investors for a reduced price. Not all but some turnkey homes are professionally managed. This hands-off approach to being a landlord is lucrative and profitable for investors who have the cash or IRA funds to invest in the turnkey rental purchase.
4. Buy and Hold
Appreciation is the goal of a buy and hold real estate transaction. The housing market does recognize gains every year in most markets. A home that is purchased for $35,000 might actually be worth $50,000 in the same year. A person who buys the home at a lower price will benefit from the annual appreciation if a property remains in good condition. Buying the home at a low price and selling it at a higher price will easily build cash for use during retirement.
5. Real Estate Partnerships
A simple partnership in the housing industry is not just a business formation. Two or more people can easily band together to each put up a portion of the funds to buy a home used as an investment. There are real estate clubs in every city that have eager partners willing to invest in the next good deal. Locating a partner who can assist with buying one or more homes is an excellent way to create flexibility in retirement. Some turnkey companies have lists of buyers who are willing to partner with a beginner investor.
Rental Homes with Cash on Cash Returns
A completely renovated property that comes with a long-term tenant lease is part of what JWB provides to investors annually. A complete guide written for beginners in the housing industry is now downloadable on this website that explains the ROI and investing strategy that is helping adults in 11 countries earn positive monthly cash flow.