There is a question that leaves most of us stumped – have we saved enough for a peaceful retired life? Well, with the going rates of inflation, it seems like there is no ceiling to what can get viewed as a safe amount to allow you to enjoy your retirement. This is the main reason as to why it is crucial to safeguard some source of income post-retirement.
The most obvious option is to rely on the stock market for the accumulation of assists following retirement. But it is fraught with risk, so how about real estate as an investment? This will pay you annually or as per your arrangement and even a basic rent-pay system will work great for you. So, without further ado, here are the main reasons for investing in real estate as a fool-proof retirement plan. Consult with specialists at Arlington Capital Management.
Predictable cash flow
The cash flow will determine the amount you can spend each month. Keep in mind that investing in real estate will allow you to enjoy a steady cash flow for years to come and will seem like a consistently paying job that you had for all these years.
Here is another significant benefit of investing in real estate. Unlike most other assets, this one appreciates which means that the only way is up with better and more substantial gains to be had as the years pass by.
Leveraging the property
Leverage is probably the most important advantage of real estate, and it allows you to borrow capital to increase the potential for the return on the original investment. You can use the mortgage to bring down the capital required for financing on other similar properties.
Build-up your equity
Real estate is usually purchased with down-payment, and you can use the balance for various debt financing purposes from a lender. The principle amount will get paid off slowly, and this will enable you to build equity. A real estate agent can help you determine rising neighborhoods with high growth potential or you can do your own research with various online real estate websites.
You can room for improvement and better growth
Keep in mind that real estate is quite a tangible asset, and you can always improve on the existing construction to add value to the property. Any value addition will only serve to increase the valuation of the property and allow you to earn more.
Make it coincide with the retirement
When you purchase a property, the cash flow and the principal reduction is lower. But once the mortgage is paid off the cash flow will increase. So, if you can plan it right by the time you retire your investments will mature enough to earn you a respectable amount.
It is tax-deductible
There are various deductions that you can enjoy with owning real estate. There are tax rebates for property upkeep, maintenance and improvements. There is a direct effect on the interest rates paid for the mortgage as well. It is also essential to understand that if you are selling your property, then the tax rates for capital gains will also decrease by 15-20% bringing down your expenses.
It is needless to say that investing in real estate is straightforward compared to investing in stocks. All you need is a reputed broker and you are set. All the best!