This post was contributed to Leisure Freak by consultant and blogger Alyssa Foster.
You decided to boost your income and enjoy your golden years even more. The question is – where to start? If you are out of ideas for a small business, then you might want to give real estate a try. If you invest in real estate after retirement, your chances of enjoying a more financially stable lifestyle are significantly higher. In addition, you get a completely new retirement mindset you never knew you needed! Having said that, let’s take a look at the benefits of investing in real estate!
Passive income is the most common reason why people invest in real estate after retirement
Not all retirees prefer the same lifestyle. While some enjoy relaxing walks in the afternoon, others still seek to establish another source of income. That’s why real estate purchase is what most retired people opt for. It generates a monthly passive income and tax deduction benefits. If you are a landlord, then all you have to do is calculate the rent that will bring you profit and cover expenses. However, remember that even as a real estate owner, there’s still a required effort on your part.
What you should have in mind is that your rental place needs occasional maintenance. Renting is highly competitive these days, which is another reason to give the place you plan to rent your full attention. In order to attract tourists, for instance, you have to make sure everything in the apartment/flat/vacation house works well. Also, there will be a need for repainting, decoration, etc. The money you invest into modifications will return you at a much higher value since the rental place will be sold out even a month in advance.
Tax deductions
As an owner of real estate, you have the right to multiple tax deductions:
- Interests – The most popular factor that reduces your taxes.
- Insurance – A rental insurance policy is another tax write-off.
- Repairs – All the necessary repairs inside your rental place are also written off from your tax payment.
- Professional services – If you decide to rent your rental place to, for example, a lawyer, you get rid of property management fees.
A vacation home is one of the best real estate investment choice
If you look forward to becoming a landlord, keep in mind that it matters what kind of real estate you will own. A vacation home is arguably the easiest and, at the same time, super profitable real estate investment. However, you must ensure that the location and surroundings add value to your vacation home. This is why it comes in handy to hire a real estate agent and go through the buying process smoothly. A professional and trustworthy realtor is a person that will make sure you get the best deal.
You can only benefit from entrusting your real estate hunt to a professional realtor:
- Real estate agents know the housing market well. Hence why hiring one saves you plenty of time.
- With the help of a realtor, the market doesn’t seem so confusing and overwhelming anymore.
- You learn the pros and even cons of a particular real estate that caught your attention.
- Once you explain to your chosen realtor what kind of property you want to invest in, they will do their best to get you an excellent deal.
- An experienced real estate agent will work in your best interest from start to finish. Even if they advise waiting for a little longer, take their advice.
Hire a professional to help you manage property finances
If you want to set your retirement plan in motion, consider hiring a financial planner. As a real estate owner, your responsibility is to keep track of your finances and leave nothing to the case. A trusted financial planner can do the work for you and make sure your retirement period remains financially afloat.
Contact a moving company to help you relocate furniture to your newly bought place
Your rental space will be ready once you get it fully equipped. If it’s a vacation home, then keep in mind that you’ll need extra help with furniture and other items. Therefore, put your spare time to good use and look up moving companies that can handle the move. According to seasoned moving specialists, one should rely only on licensed movers with experience. Furthermore, they must have tools and equipment that make moving a smooth process. For instance, if your vacation place is a bit further from the city, movers can simply load the truck and transport professionally packed items. That’s why it’s important to research any particular company before you sign a deal.
Real estate is a valuable long-term investment
Before you tap into real estate investing waters, remember that patience is your biggest asset. Moreover, real estate is an investment that should pay off in the long run. From the moment you make a concept and start researching the market, it’s necessary to remain strategic. Only sensible decisions will bring you coordinated passive income and a much more relaxing golden years. Furthermore, you will get a completely new outlook when it comes to your retirement period! You will realize it can be joyful and far from dull, especially if you venture into something new (like investing in real estate).
Conclusion
At first, it seems complex to invest in real estate after retirement. On the other hand, it’s a fun process through which you learn more than you hoped for. At the same time, you discover how to deduce your taxes and learn how to promote your rental space in the best way possible. For a start, decide whether you opt for commercial or residential renting. Maybe you could join Airbnb and attract more digital nomads or tourists. The options are endless. Furthermore, the more effort you put into your real estate, its value increases. This gives you an advantage in case you decide to sell further your rental space at some point.
Thank you Alyssa Foster for sharing your expertise with Leisure freak readers.