With many people living longer these days, one of the biggest fears on the minds of retirees (as well as those who are fast approaching this time in their lives) is ensuring that retirement income doesn’t run out.
Unfortunately, directly dipping into your savings can be a recipe for quickly running out of money down the road – leading to the worry of how to support your lifestyle going forward. Likewise, even just a slight stock market “correction” can literally deplete many years of hard earned savings and investments in the blink of an eye.
And, even if you qualify for Social Security retirement benefits, these will typically only replace about 40% of the average worker’s pre-retirement income. So, where can you make up for the rest?
One way to set up an ongoing monthly income stream is through the purchase of real estate rental property. Before you do so, though, there are some factors that you should consider, which in turn, can have an effect on how – and how much – you ultimately bring in.
First, unless you plan to use a large amount of your savings to buy a property outright, you’ll need to consider your financing options in terms of how much will be going out each month as versus coming in.
Likewise, the amount that you may need for your down payment can help to keep your mortgage payments lower, but it could also be taking away from funding other retirement income sources that you might have (such as an annuity or dividend paying stock).
It is also important to think about the time that investing in rental real estate can take. This includes the management of your tenants, as well as the time that repairing and / or replacing broken items can take.
A viable solution here is to work in conjunction with a property manager. In this case, you can delegate all of the time-consuming day-to-day operations of your property, while still earning a steady income stream.
Want more information on how working with a property management team in Orlando and the surrounding area can benefit you? Contact Us today.