Is real estate a good investment that many people consider a security blanket to wrap them in during their golden years? It can either be a ticket to a comfortable lifestyle or a dagger to one’s neck. Nevertheless, what does it take to venture into real estate investments for retirement and not lose the money you’ve worked for all your life?
- Knowledge: Like any career, real estate investments for retirement require sufficient knowledge about what you’re getting into. It can take years and lots of patience. Still, if you spend time attending seminars, reading books, or getting advice from professionals, you can turn real estate investment into a new profession.
- Skill: Some people are born with a knack or inner sense to spot a piece of land and immediately tell its potential. If you’re that type of individual, you can speculate how the market will react once a house is remodelled, or property is offered for sale or lease. Determine what skills you have, and pair them with your resources. For example, connect with your contractor friends in remodelling that cottage at a discounted price. Or you can have a few drinks with your friends at the city development office to know which piece of land has great promises in the market.
- Intuition: You need to have the right instinct to know what part of town has the making of a future hot commercial spot and which area to tick out from your list. Prime location is essential because your property will always be in high demand, even in a slow economy. Get enough information about the area before buying a piece of property. Don’t just follow the current trend and jump in where many people dare to. Savvy investors combine intuition with skills, telling them to wait before making a kill.
- Guts: Real estate investment is not lacking in negative bits. Aside from paying the property taxes, there are times when you need to continue paying the mortgage even if the property is vacant. In addition, there’s the maintenance, utilities, and repairs to take care of. Sometimes, it can be easy just to sell it, but then it is not as quickly as can be said. Guts will tell you what to do, whether you’re going to hang on to it, wait for a few more years, or sell it right away at a lower price.
Real estate investments for retirement can be a good source of income if you’re patient and systematic in building a portfolio of properties with great potential for producing income. Being retired or having plans to retire is not the time to look for means to become rich overnight. It is the right time when you need to be looking for a solid and steady source of income to have comfortable retirement years.
How to Get Started with Your Real Estate Investment
Deciding to invest in real estate should begin before you hit your golden years. Why is that? Well, that will give you enough time to save money. Such is especially true if you plan to finance the property with a mortgage. Mortgage lenders will be more comfortable loaning money to someone who has a steady job to ensure they get paid as scheduled.
How much you can borrow will also depend on your income and debt, if there is any. You would also do well to save up a significant deposit because the larger your deposit, the lower the interest rate you will incur. What’s more, you’ll be entitled to smaller monthly repayments.
Keep in mind that it’s not so much an issue of how much you can borrow but how much you can afford to borrow. Hence, you must get your finances in order to ensure that you are in an excellent position to borrow money and pay it back accordingly.
You may want to consider using a mortgage calculator to find out how much the monthly mortgage will cost you or see if you have enough saved up to take care of monthly mortgage payments. There are plenty of tools online that can help you determine how much you need to set aside for the real estate property you want to invest in.
There’s no denying that cold hard cash is still the most liquid investment. However, having easy access to cash can lead to wanton spending. Of course, there’s nothing wrong with treating yourself to a vacation once in a while. However, you want to see your money going to something more tangible.
While real estate is not a liquid investment, think of how much you can profit when it’s time to liquidate your property. With many people considering real estate investments for retirement security, you may find that there’s no better time to buy real estate than now. Really, as long as you know what you’re dealing with when venturing into real estate investments, you will have yourself set up well into your retirement years.