Planning for retirement isn’t easy. If you’re interested in making extra income in your golden years, you may wonder if real estate is a good investment. Let’s look at some potential examples to find the answers to that question.
Investing in real estate provides you with the opportunity to generate income. However, this still comes with inherent risks.
For example, let’s say you want to downsize but love your current home. You could rent out the property to let other people enjoy the living space. This can work out great if you have renters who pay on time and care for the house as much as you do.
On the downside, you may encounter renters who don’t pay on time, which can be stressful if you rely on that extra income. The people also may not take care of the home as you did. In these scenarios, you’ll likely have to pay for repairs, even with getting a security deposit back.
One possible real estate investment that can be good for retirement is flipping properties. This idea works especially well if you are passionate about DIY and home improvement.
You can buy a property at a low cost and make a substantial profit when you play your cards right. Some houses may only need some surface-level repairs, which are the properties to go after. A home in need of more serious work, such as foundation repair, likely would not turn a profit.
Before you acquire a property, it’s crucial to have a home inspector look at it first. This will give you insight into how much money the repairs could cost.
Renovating Your Current Home
One way you could increase your home’s value is by undergoing renovations. While most want to downsize at this point in their life, there are reasons retirees consider upsizing.
One of the most important reasons is providing for you and your family. If you need different accommodations later in life, having enough space to allow wheelchair access is helpful. This also works well if you always want to stay in your home, as you can accommodate a live-in caregiver.
For empty nesters, it’s an opportunity to provide space for guests, whether it’s friends, children, or grandchildren. In retirement, you have more freedom to entertain on your schedule. You can create plenty of memories in a large home.
While real estate has the potential to be a good investment for retirees, it’s important to consider the risks. Many unknown factors come with renting and flipping houses. Some people might want to avoid those paths. In that case, it’s likely best to improve the value of your current home with renovations.