Planning for retirement can be a daunting and time-consuming process. During the earlier years of our lives, many of us avoid thinking about retirement at all. We focus on our financial goals in the present, and assume we’ll end up with enough cash to maintain our lifestyles by the time we get old enough to leave our jobs for good. However, the reality is that ignoring your retirement for too long could mean you end up with a relatively poor nest egg to work when you get older.
If you’re approaching retirement and you feel like you don’t have enough cash available to maintain your lifestyle, then you might be looking for ways to increase your available income, without having to take on a second job. Real estate could be the ideal option. There are numerous ways for people of any age to get involved with real estate to boost their cash flow almost immediately. Here are a few options to consider.
Pay Off Your Mortgage
One of the simplest and most convenient ways to increase your available cash with real estate as you get older is to pay off your mortgage. Whenever you end up with extra money in your savings that hasn’t already been dedicated to something else, like a short-term goal or emergency savings, look to paying off more of whatever you owe on your house. Without a mortgage to pay for, you’ll have more money left over at the end of each month, which you can choose to spend however you like. What’s more, paying off your mortgage will mean you have full access to the equity in your home, so you can even consider re-mortgaging later if you feel you need to access more money.
Buy a Vacation Home
If you already own your primary home, or you’re close to paying it off, then you might consider investing in additional real estate with a vacation home. A vacation home can be an excellent way to build your wealth for a range of reasons. First, it gives you more exceptional assets you can pass on to your family members in the future when you’re no longer around. Secondly, it provides you with a fantastic location to visit whenever you want a break from day-to-day life.
A vacation home can also be an excellent source of additional income, as you can rent it out to other users when you’re not living in it. Just keep in mind, buying a vacation rental comes with numerous factors to consider. Before you take the plunge, it’s worth making sure you understand all your financing options and do your due diligence to ensure you’re purchasing the right property.
Purchase Cheap Properties and Flip Them
Flipping properties is an excellent way to make some additional income, particularly if you’re already retired and you can dedicate plenty of time to searching for the right opportunities, and overseeing the renovation of anything you buy. This strategy will take more time and focus than other methods of making money with real estate, but it can be a fun and fulfilling strategy for some people. The key to success is making sure you know which properties to buy, and how to upgrade them as cost-effectively as possible. You’ll need to carefully research the areas you’re thinking of buying properties in, evaluate them for potential revenue opportunities, and work with the right people to transform your unloved properties into potential goldmines.
Consider Real Estate Investment Trusts
If you like the idea of investing in real estate, but you don’t want to get involved with renovating properties, or managing them yourself, you could consider REITs. Real Estate Investment Trusts give those from all walks of life an opportunity to invest in a collection of properties and real estate assets. They’re like mutual funds, but instead of investing in a collection of company stocks, you’re paying to own a part of a group of properties.
REITs have special tax statuses which allow them to pay out most of their income in the form of dividends, which can make them an excellent source of income. However, it’s worth noting there are various forms of REITs available, and some are riskier than others. Make sure you do your research before you start spending your money.