All of us want to secure our financial future. More and more, we see that Americans are ill-equipped to support and sustain a worthwhile retirement — if they’re able to retire at all. But let’s look on the bright side: real estate investment is consistently rated as one of the best investments you can make. That designation comes from millionaires.
Today, investing in real estate is more accessible than ever. With home values growing nationwide and unprecedented rental demand, the opportunities to invest in real estate are many. It’s a bright future for anyone who looks to invest in real estate.
However, not every real estate investment strategy is going to be well-suited for building (and sustaining!) a retirement. Establish long-term success now with the right investment strategy.
Key Components in a Retirement Investment
When looking to use investing to supplement, build, or sustain your retirement, there are a few key factors that you must prioritize. For an investment to be worthwhile for the long-term and far into retirement, it must:
Be Hands-Off
The problem with several investment strategies, including the fix-and-flip model as well as being both owner and property manager, is that you have to be highly active and involved in order to facilitate success. Think about retirement: do you really want to keep working as a flipper or landlord once you retire?
It’s about more than convenience, too: with age comes physical challenges. We may simply not be able to do it after a certain point. While no real estate investment strategy is truly “hands-off” in that they all demand a certain level of input and engagement, they can be “hands-off” in the sense that your physical presence, daily input, and decision-making are not required. This frees up your time and energy for the pursuits that you truly value in retirement.
Be sure to check out: The Essential Quickstart Guide to Preparing for Early Retirement
The ideal “hands-off” investment strategy is turnkey real estate investment. While most of our readers are no doubt already well-acquainted with this model, as a refresher, turnkey real estate means that you purchase properties that have already been inspected, vetted, and even renovated — so that the investor can step in and immediately begin earning passive income. Throughout the years, your turnkey provider’s property management team oversees and executes all maintenance, resident issues, and general management. This ensures that your property retains its value over time.
Two of the biggest risks in real estate investment are poor quality residents and unexpected repairs. Your turnkey provider helps mitigate these risks (thus increasing your wealth) by carefully vetting residents, minimizing resident turnover, and through diligent maintenance.
Provide Passive Income
Why is passive income important? When it comes to turnkey real estate, you benefit in three major ways: passive income, tax incentives, and equity. Together, these help you build and maintain wealth. For those looking to retire and use real estate investing as a means to do so, passive income is especially valuable.
As you hold your properties, the cost associated with them goes down over time (as you will eventually pay off the mortgages). This leaves more of that passive income to go to other things. Passive investing is ideal for investors because they provide a steady cash flow versus a single account for retirement. Passive income is certainly not the only significant benefit to the turnkey model, but it is significant just the same.
Be Future-Minded
If you’re planning for retirement, you are obviously future-minded in some way or another. Turnkey real estate investment pairs well with planning for the future in that it allows you to live in a planning, “big picture” mindset. Other investments will entangle you with day-to-day troubles and momentary issues.
Turnkey real estate is, by nature, a buy-and-hold investment. Not only does the investor not have to fool with the daily grind, but they can be content knowing that their investment is intended to last years, even decades — and like a fine wine, it only gets better with time.
Ultimately, this is what makes turnkey real estate investment ideal for retirement planning. The combination of a long-term model with passive income and little need for investors to deal with the day-to-day creates a time-tested retirement investment.
It’s never too early to start. Contact an REI Nation adviser today!
