With Baby Boomers entering retirement, many of us are looking to grow retirement funds faster. The economic lows in our lifetime hit our retirements accounts hard, so we’re leery of the stock market. Real estate offers lots of options for growing our retirement income with the security of real estate, so let’s talk about it.
BUY AND HOLD RENTAL PROPERTIES
With low interest rates on mortgages and high rental demand, this is an excellent investment option for creating a monthly cash flow. The challenge is buying properties that a family will love at a price that still provides a good return on investment (ROI). Considering your holding costs with your potential income before buying these properties helps you find the perfect deals for this investment opportunity. Definitely a way to have a regular monthly income during your retirement years.
Tenant horror stories and home maintenance issues are the biggest risks for investors, but these are rare. A good property manager takes care of the worst of these. Your rental properties will remain in good shape with fewer bad surprises when you schedule routine home maintenance. Home maintenance expenses should be included in rental price, so your renters are actually covering that expense.
REHAB OR FLIPPING PROPERTIES
With the popularity of the HGTV shows of talented folks flipping homes for a profit, everyone is interested in flipping a house. The biggest challenge is finding a property priced low enough that, after the repair and holding costs, will sell at a price that provides a good ROI. The other challenge is managing a construction crew, deadlines and construction costs.
We joined FortuneBuilders use their excellent systems, so we learned to flip properties quickly and profitably. Without their systems, we would still be learning, instead of having completed our first deals. Their systems taught us how to market for properties, estimate repairs, and analyze and negotiate the deal. They also have systems to complete the repairs and sell quickly for a nice profit. It’s not without stress, and there’s lots of risk without these systems, so it’s not for everyone.
INVESTING IN PROPERTIES BEING FLIPPED
Another way to grow your retirement income is to invest money in real estate projects. For those who don’t want the stress of flipping properties themselves, opportunities exist to invest the money required to purchase and/or repair properties. A property lien secures the investment. The investment is repaid with interest at closing once the property sells. Usually flippers are willing to pay a higher interest rate than offered by other investments opportunities. Once investors invest their money in this way, they want to keep their money earning these higher rates.
Our marketing is working so well, sometimes we have more properties available than we can work on. In those cases, we may have a great deal on a rental property or on a property to flip that we could pass on to you. If you’d like to learn more about any of these investment opportunities, we’d love to talk to you.