5 Tips for Retiring with Rental Investments
While it may seem like it is too late to start investing in real estate later in life, the reality is that it is never too late to get in the real estate business. Since your financial situation is likely to be vastly different from what it was in your twenties and thirties, however, there are a few tips that you should keep in mind in order to enjoy the greatest amount of success when investing in rentals later in life.
Tip #1: Set a Goal
No matter how old you are when you get involved in real estate investment, setting a goal is one of the keys to success. As someone who is getting started in investing later in life, you will want to pay particular attention to your retirement and setting up your investment so you can enjoy ongoing income during your retirement years. As such, you should select properties that are likely to provide you with long-term passive income. As an added bonus, you can forecast your income rather accurately before you invest a single dollar into rental properties, thereby allowing you to better plan for your retirement years.
Tip #2: Take Advantage of Your Network
As an older adult, you are likely to have built a much larger and stronger network than you had when you were younger. Now is the time to take full advantage of the power that your network can offer! Consider who you already know in the real estate, mortgage and construction industries that you can utilize to help with buying, preparing and maintaining your properties. You may also have someone in your current network who would be interested in investing along with you, allowing you to pool your money together in order to generate even more income.
Tip #3: Utilize Your Financial Superiority
As an older adult, you likely have built up a stronger credit rating and you may have extra cash already saved and ready for investing. Take advantage of your extra savings and income by setting it aside to use toward your property investment. This extra capital can help you to negotiate better deals while also avoiding financing fees. It can also be used to make a higher down payment, thereby reducing your monthly mortgage payments while also helping you to avoid paying for mortgage insurance.
Tip #4: Look for a Property with Options
As you are looking for an investment property, pay particularly close attention to those properties that offer flexibility in terms of income generation. Multifamily dwellings can be a good investment when looking for a property to provide passive income, as you can rent to multiple tenants at one time. Not only can this increase your overall income, but it also helps to ensure your property will always be occupied by at least one tenant.
Tip #5: Reinvest Your Income
As the income starts to flow in from your rental property, look for ways to reinvest in additional properties. As you increase your portfolio, your overall passive income will also increase. Reinvest your income wisely and you will be sure to enjoy the benefits of owning investment property well into your golden years.