Real Estate Investment should always be part of your retirement planning.
People are living longer than ever before, and that’s great news. However, this means that retirement is lasting longer too. Careful planning is vital if you want to spend those years in financial comfort.
A mixed and well-balanced investment portfolio is the best way to provide for retirement, and real estate should be a part of it if you have the funds. Here are seven reasons why.
1) Solid Returns
Recent years have been tough for many parts of the economy, but real estate has largely held up with prices continuing to trend upward. Although the market can rise and fall over the economic cycle, in the long term average values have always beaten inflation.
2) Income Generation
Although, Real Estate investment is for your retirement, it can also provide income in the meantime. You can use rent payments to cover any mortgage debt and put what’s left over to work in another investment. Alternatively, you could use the income to enjoy a more comfortable life in the here and now.
3) A Physical Asset
Real estate has a physical value regardless of current economic conditions. While a financial crisis can wipe out the value of shares or bonds, real estate will always have an intrinsic worth. People always need somewhere to live.
4) Easy to Track
Tracking the performance of segregated funds or ETFs isn’t something most people can do at a glance. You’ll need to put your trust in your financial adviser. Although there’s nothing wrong with this, monitoring the value of your real estate investment is much easier. Simply look up its estimated market value, deduct any debt secured on it, and you have its current worth.
5) Hassle-Free Management
Investing in real estate doesn’t mean you need to become an active landlord. Management services are affordable if your rent income exceeds mortgage payments by a healthy amount. These services can handle everything for you, from tenant relations to repairs and upkeep. This makes real estate an almost ‘set and forget’ investment option.
6) Capital Access
Most pension plans make it difficult to access your capital before maturity. While this is sensible, most people don’t want all their wealth tied up where they can’t reach it. By selling your real estate, you can realize your asset if life takes a turn in a different direction.
7) Inheritance Issues
Annuities provide an income during your retirement but have no value once you and your spouse are no longer around. Real estate can be passed down to your family instead of boosting the bank balance of your insurance company.
Life expectancy continues to rise year by year, and this makes retirement planning more important than ever. Advice from a financial planner is essential, but real estate investment deserves a place in any balanced retirement portfolio.
Contact Mona Koussa to find out what type of real estate investment will work for you best.