Buying a Rental Property for Passive Retirement Income and Why it Makes Sense
Have you ever thought about buying a rental property? It may be that you’ve always assumed it would be a huge hassle, and wondered what the buzz is all about. Well, not only is it a safe way to invest your money in a market that is less volatile than stocks, you can generate a passive income to support your retirement.
If you’re smart about the property you purchase and the tenants you take on, the process can be seamless and profitable. Also, if you factor a property management fee into your budget, you don’t even have to handle the logistics. A property manager can take on all your day-to-day duties and tenant interactions while you profit from the rental income. That’s not too stressful, is it?
Passive Income is the Best Income.
The key to benefiting from rental property passive income is to consider the amount you can reasonably charge in rent versus your current and future expenses. Your current expenses include your known costs like your fixed mortgage payment while your future expenses include more unexpected costs that come with property repairs, potential property management services, and times of tenant vacancy when the property is unoccupied.
The best rental property investment includes rental income that exceeds all your costs which equals extra money in your pocket every month. What would you do with some extra cash coming in? Perhaps you can plan that trip to the islands you’ve been daydreaming about or put some money aside for any anticipated future bills. Maybe you even want to retire somewhere new and could use your current home as a profitable rental property. The possibilities are endless.
Just Say Yes to Tax Breaks.
Buying an investment property comes with a handful of advantages – one being tax breaks! And this isn’t just dropping off a bag of clothes at goodwill, these tax breaks can really pay off! Typical expenses like your investment property’s mortgage interest, insurance premiums, and legal fees are all tax deductible.
Other expenses surprisingly eligible for tax deductions include marketing costs associated with finding renters, home maintenance, property management support, and even gas money spent traveling to and from your property. Just make sure you document all of it! Your accountant will thank you.
Retirement – Here You Come!
Are you ready to retire early or if you’re already retired, to move somewhere new? Have you dreamed of running a bed and breakfast in Spain? Maybe you’ve always wanted to hike Patagonia or take an around-the-world cruise. If you focus on finding properties with the greatest rent to value ratio while keeping your expenses and vacancy low, you can benefit from an amazing passive income.
You could potentially even reinvest that rental income into additional properties and increase your earning potential significantly. Many property investors are living off the passive income generated from their properties, even without retirement savings or social security.
Whether you want to protect your savings during retirement or get away from the 9-to-5 earlier than expected, buying a rental property can lead to financial independence. Becoming a landlord doesn’t even have to consume your life or limit your investments to your own location. Hire a property management company and rest easy knowing your properties and tenants are being taken care of. Ask your agent at Award Realty for some suggestions on potentially profitable rental properties.*
Now – it’s time to go enjoy the golden years.
*Rental investments are not guaranteed and buyers should first seek independent legal and financial advice.