Planning for the Future: Real Estate Investing Could Boost Your Retirement Income

 Posted on December 00, 0000 in Naperville Real Estate Attorney

As investors near retirement, they may begin to worry that their nest egg will not be sufficient enough to sustain them. Could real estate investing help boost them over the finish line? Perhaps, but it is important that potential real estate investors understand the various investing methods, as well as the challenges and pitfalls that can accompany each one. Learn more in the following sections, including how a seasoned real estate lawyer can help you in building a successful real estate portfolio.

Why Real Estate Investing? 

Real estate tends to be one of the least volatile investing markets, and it typically outperforms other asset classes. That can make it a wonderful diversification tool for the seasoned investor, especially if they are nearing retirement age. It is important to understand that real estate dips do occur and your money is not typically as liquid in the real estate market, so you must be willing and able to weather the potential storms.

Real Estate Investing Methods That Can Boost Your Retirement

Real estate investment trusts, or REITS, are like mutual funds, but instead of owning stocks and bonds, they own residential, commercial, industrial properties, or mortgage securities. Owners avoid taxation at the corporate level by passing 90 percent of their earnings from rental payments, loan and mortgage payments, and sold property gains over to their shareholders. They can produce capital gains, but the biggest appeal here is the potential for steady dividend income.  Just keep in mind that that income may decrease when interest rates rise since the economic downturn can make older investments less generous than new ones. Such decreases are usually offset by increasing rent prices, there can be a lag before higher yields are again achieved. You also give up a lot of the control by not owning the property yourself.

Direct ownership can magnify your earnings while also giving you more control over the pricing, which means you are less likely to experience ROI lags. Just keep in mind that direct ownership means assuming more risk, and you will likely need some capital to break your way into this real estate market. It is also likely that you will need to shoulder the weight of a loan, so you need to ensure that your investment property is capable of consistently earning you at least a 6 percent return, even when an economic downturn occurs.

Contact Our Naperville Real Estate Lawyers

Investors who are new to real estate - and even those who are seasoned - tend to fare better ROIs when they have the skilled assistance of a seasoned real estate lawyers. Lindell & Tessitore, P.C. is one of the most trusted firms in the state. Get started by scheduling a personalized consultation with our Naperville real estate lawyers. Call 630-778-3818 today.

Source:

https://www.cnbc.com/2018/08/08/4-ways-real-estate-can-boost-your-retirement-income.html