Retire As A Real Estate Investor
Many realtors put their experience in buying and selling property to good use even after retirement. They use that experience to make a very comfortable retirement for themselves. They are qualified to implement investment strategies and see many opportunities that others are never exposed to.
Realtors who do not participate in the financial rewards of real estate investment are missing a golden opportunity.
Consider one or all of these investing strategies:
Buy for rental income – Buying with the intention of holding the real estate property for rental property allows the investor to slowly work on the property until they deem it ready for renting. A lot of investment properties are obtained by assuming existing mortgages or through owner financing.
Once the property is paid off, the rental will generate about a 7.5-8% annual income. In other words, if you own a $100,000 house that is paid for your should earn no less than $7500- $8000 year income from its rent. This is in addition to the taxes, insurance, maintenance management and other necessary fees.
You need only 10 of these homes to create an annual income of $75,000 - $80,000 per year. No retiring on a fixed income for you! In order to profit well, one should consider buying properties near each other to make management easier.
Also using a property management company creates a liability barrier between you and your renters because the property manager handles all the day to day dealings. In turn, they assume a portion of the issue risks such as fair housing practices and lead paint disclosure.
Buy and eventually sell – This method involves acquiring one or two properties per year and then selling them off after 12 – 15 years. This method should produce a continuous stream of income if you use part of the proceeds from the sale of a property to help buy another property and live on the rest.
It has a potential of $100,000 per year income after setting aside enough to continue acquiring two properties a year.
If this sounds too time consuming, you may want to try selling off half of the properties you have acquired over the years and use the sale proceeds to pay off the other half of the properties. This would create a cash flow from the remaining properties.
The income would not be nearly as large as in the buy and eventually sell method but it would afford you the time to work in your own garden instead of the gardens of your rental properties.
Buy and resell – Many real estate professionals have the advantage of recognizing an ever changing market such as real estate. Some may see potential in a property and will be able to buy low and resell it in a few short years at a new high. You can develop your own buying plan but some realtors will buy homes that don’t sell by the end of the listing contract.
This is a continuous pipeline for new real estate investments. However, don’t take advantage of a selling with money problems and buy a home at an unfair price. This practice can damage you professional reputation.
Build and sell – Developing properties is not for everyone. You must have knowledge of the market in order for the above methods to be of any use to you. However building in an up and coming area may be just the ticket for you. This is not easy, but you can develop a property and get a 15 – 20% return on your initial investment when you finish and sell, and that justifies the risk.
Slow periods in the market are a great time to develop and sell property. You can use pre-taxed retirement money to invest through an IRA. All income and expenses from the property are then in return, paid for by the IRA.
Look for property with below market rents. Resist the urge to over improve your properties or they will not be affordable. Make your decisions on the numbers and not your emotions. After all you aren’t going to be living in the home you are going to rent it. Finally, don’t stop with one investment property. The buying and renting only gets easier after the first one.
Realtors who do not participate in the financial rewards of real estate investment are missing a golden opportunity.
Consider one or all of these investing strategies:
Buy for rental income – Buying with the intention of holding the real estate property for rental property allows the investor to slowly work on the property until they deem it ready for renting. A lot of investment properties are obtained by assuming existing mortgages or through owner financing.
Once the property is paid off, the rental will generate about a 7.5-8% annual income. In other words, if you own a $100,000 house that is paid for your should earn no less than $7500- $8000 year income from its rent. This is in addition to the taxes, insurance, maintenance management and other necessary fees.
You need only 10 of these homes to create an annual income of $75,000 - $80,000 per year. No retiring on a fixed income for you! In order to profit well, one should consider buying properties near each other to make management easier.
Also using a property management company creates a liability barrier between you and your renters because the property manager handles all the day to day dealings. In turn, they assume a portion of the issue risks such as fair housing practices and lead paint disclosure.
Buy and eventually sell – This method involves acquiring one or two properties per year and then selling them off after 12 – 15 years. This method should produce a continuous stream of income if you use part of the proceeds from the sale of a property to help buy another property and live on the rest.
It has a potential of $100,000 per year income after setting aside enough to continue acquiring two properties a year.
If this sounds too time consuming, you may want to try selling off half of the properties you have acquired over the years and use the sale proceeds to pay off the other half of the properties. This would create a cash flow from the remaining properties.
The income would not be nearly as large as in the buy and eventually sell method but it would afford you the time to work in your own garden instead of the gardens of your rental properties.
Buy and resell – Many real estate professionals have the advantage of recognizing an ever changing market such as real estate. Some may see potential in a property and will be able to buy low and resell it in a few short years at a new high. You can develop your own buying plan but some realtors will buy homes that don’t sell by the end of the listing contract.
This is a continuous pipeline for new real estate investments. However, don’t take advantage of a selling with money problems and buy a home at an unfair price. This practice can damage you professional reputation.
Build and sell – Developing properties is not for everyone. You must have knowledge of the market in order for the above methods to be of any use to you. However building in an up and coming area may be just the ticket for you. This is not easy, but you can develop a property and get a 15 – 20% return on your initial investment when you finish and sell, and that justifies the risk.
Slow periods in the market are a great time to develop and sell property. You can use pre-taxed retirement money to invest through an IRA. All income and expenses from the property are then in return, paid for by the IRA.
Look for property with below market rents. Resist the urge to over improve your properties or they will not be affordable. Make your decisions on the numbers and not your emotions. After all you aren’t going to be living in the home you are going to rent it. Finally, don’t stop with one investment property. The buying and renting only gets easier after the first one.