If you're like most Americans, you're concerned about your future - especially retirement.
That's because 57% of currently retired U.S. adults rely on Social Security as their primary source of income.
When it comes to retirement planning, adding another pillar to your retirement plan is the key to a better life. If you already have a 401K or an IRA, adding real estate investments can boost your portfolio and help you maintain your quality of life in retirement.
Why are real estate investments so popular for retirement planning? Here's why.
Multiple Ways to Invest
There are a lot of ways to invest in real estate. For starters, you can pay off your home and own it. For the majority of people, their home is one of their greatest assets.
You could also invest in REITs or Real Estate Investment Trusts. A REIT is a collection of real estate assets or properties.
They are similar to a mutual fund, but the company stocks have been replaced by a collection of properties. REITs have a special tax status that requires them to pay out at least 90% of their income as dividends.
You could also buy and flip property. You would purchase a fixer-upper home, then sell it once improvements were made to the property. However, this takes time and home improvement skills.
You could also rent out a residential property. However, this is far from a source of passive income.
Your property may incur expensive maintenance costs. You could have trouble finding suitable tenants.
If you can't manage it yourself, you can hire a property management company to manage it for you, in exchange for a portion of the rental income.
You could also buy a vacation home and rent it out part-time, especially if it's in a desirable location. Or you could purchase commercial property and rent it out to multiple tenants.
Other Perks of Real Estate Investing
Investing in real estate is a great way of diversifying the assets in your retirement plan. Along with other retirement vehicles such as emergency savings, a 401K, IRA, or pension, real estate investments can be one pillar of retirement.
While some investments are more active than others, options such as REITs can be more passive investments.
Another benefit of real estate is that it usually appreciates in value. This isn't guaranteed, but if you invest in a desirable area, it's more likely to happen.
Finally, you can always get out of your real estate investments and sell them. In some cases, you may have inherited a home, and are now wondering what to do with it. You can always sell your inherited home.
Include Real Estate in Your Retirement Planning
If you're looking at real estate investing as part of your retirement planning, make the process easier for yourself by choosing Wolfnest. We can manage your Salt Lake City area rental property for you.
Contact us for more information, or hit the Request Free Rental Analysis button above for a free analysis of your property.