Buying and holding real estate is an excellent retirement strategy.
Do you have a retirement strategy in place? If not, today I’ll talk about buy-and-hold real estate investing as a potential option to save up for your retirement years.
If you didn’t already know, investing in real estate is a great way to build wealth and create passive income. Many Americans choose this strategy as a way to increase their net worth.
So how can you become a real estate investor? If you’re thinking about leveraging real estate as a retirement plan, keep these three tips in mind to help you start your portfolio:
1. Consider house hacking. This is where you buy a property that’s either a single-family house, a two- to four-unit property, or a condo; you’ll live in a part of the property and rent out the rest. In the case of a single-family home, you’d rent out the bedrooms that you’re not using. There are loan programs with low down payments available to help you get started on your portfolio. Keep in mind that you only have to live in these properties for a year, and then you can move on, buy another home, and rent out the previous one.
“Too many investors buy a property only to find out that the cash flow isn’t as good as they initially thought.”
2. Tap into your home’s equity. If you currently own a home, speak to your lender about home equity lines of credit and home equity loans. You can use the equity in your current property to pay for the down payment, closing costs, and other expenses involved with buying another property. That will give you momentum to generate long-term cash flow and appreciation.
3. Ensure that the property you’re interested in will bring a good return. Do the math—run your expenses through a rental property calculator to make sure that the property is worth your time and money. Too many investors buy a property only to find out that the cash flow isn’t as good as they initially thought. Remember to factor in the cost of property management, as well as any repairs and improvements that are necessary.
If you have any questions about becoming a real estate investor or would like more detailed advice about starting your own portfolio, don’t hesitate to give me a call or send me an email. I’d love to help you.