Real Estate and Retirement

Whether you’re in your 20s, your 40s or your 60s, it’s never too early or too late to start thinking about retirement. As the old proverb goes, by failing to prepare, you’re preparing to fail – and this can be said about retirement, too.

Building a real estate portfolio is one of the golden tickets to enjoying a fuller, more stable retirement. It allows you to live better than on the pension, and ensures something is passed down to your children so that when they’re at retirement age, they’ll have an asset or two to help them live better as well.

Many of our clients are thinking about retirement when they’re looking at real estate investing. The good thing is, by thinking about this, you’re already on the right track!

Let’s discuss real estate and retirement, its benefits and how we can help you achieve a better retirement through smart property investing.

How to use real estate for a better retirement

There are a few key ways in which real estate can be used for retirement:

• Using rental income for retirement
  The most popular way for investors to retire is to live off the rental income generated by investment properties. While there are many investors who successfully use this strategy to provide income while in retirement, there’s a few considerations to take into account first. Investors should calculate the amount of rental income needed to fund their lifestyle, while deducting potential expenses such as maintenance, taxes, and periods when property is unoccupied.

• Selling a property to fund retirement
  Investing in a property now and selling it when you’re due to retire is another way in which real estate can fund retirement. Historically, property has only ever had an upward trend in value, so it’s safe to say that a property bought now will be worth a lot more in 10, 20 or 30 years’ time.
  
  Selling this property when you’re at retirement age can provide enough money for you to live off in your golden years. However, investors should be careful to calculate the amount of cash needed to live off a property sale, and be mindful that a steady flow of rental income may not be coming in. Part of the money should also be reinvested in other assets, like stocks and bonds.

• Borrowing against your equity
  Want to finally take that trip you’ve been looking forward to, or purchase that caravan you’ve been dreaming of? If you don’t have enough savings to buy it outright, you can borrow against the equity of your investment property and slowly pay it off using your rental income, allowing you to tick off those things on your bucket list.

Patrick Leo is Australia’s leading team of property consultants, dedicated to improving your retirement through property investing. Our specialist team helps our clients buy property that allows them to live out their golden years the way they deserve. Have a chat with Patrick Leo today and continue your journey to better retirement and financial freedom.