Maybe you hesitate to invest in a rental property, even while you’re thinking about how it can help you retire, because you don’t want to be a landlord.
We don’t blame you. Renting out a home in California is complicated.
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Are you thinking about retirement?
It’s probably crossed your mind, whether you’re inching closer and closer to retirement or you’re settling into your career and thinking about how you can position yourself financially for retirement several decades from now.
There are a lot of things to consider when you’re planning for retirement, such as where you’ll live, what you’ll use for income, and what you should do with the home you’re living in.
Humboldt County is a peaceful and pleasant place to retire, and people are drawn here for the dramatic views, abundance of outdoor recreation, and high quality of life. While a lot of retirees are likely to sell their property and move to warmer climates like Arizona or Florida, more and more people are choosing to simply downsize into a smaller home and a more contained lifestyle while remaining close to family, friends, and community.
As you decide how to manage your retirement money, where you want to live when you retire, and what your lifestyle will look at, think about how
investment property can help you reach multiple goals. If you buy a property now and rent it out until retirement, you’ll have accomplished a few important things.
First, you’ll have secured retirement housing for yourself if that’s where you decide you’d like to live.
Second, you’ll have put some money into a valuable real estate asset that’s going to appreciate even while your tenants help you pay down the mortgage.
Third, you’ll have bought a tangible asset that can protect your entire retirement portfolio against inflation and provide you with some income later on - even if you decide to live elsewhere.
You can structure your retirement in a number of different ways. Rental real estate can be a big part of the plan, and we’re ready to help.
It’s not a bad investment strategy to buy now with an expectation that you’ll retire in the home you’re purchasing.
Whether retirement is imminent or a few years down the road, if you own the home you’re living in - hold onto it. The market is shifting, and if you haven’t sold your home or refinanced your mortgage in the last few years, now is probably not the best time to do it. Stay where you are, and look for additional investment opportunities.
Buying an investment property now still gives you several options for your retirement:
Owning a piece of investment real estate offers options.
Renting out a home now and once you’ve retired can provide unparalleled financial security.
Whether you intended to become a real estate investor or you’re simply looking for creative ways to fund your retirement, there are dozens of benefits to owning and renting out property in Humboldt County. Here are just a few of them:
When you own a rental property and you can keep it occupied with reliable tenants, you’re earning rental income every month. Even if what you earn does not completely cover the cost of your mortgage and other expenses, you’re making a big dent in the cost of your investment. The longer your hold onto that property, the more your tenants are paying. This will dramatically reduce what you owe, and eventually, you’ll arrive at the point that you’re earning more than you’re spending on a monthly basis. That’s some easy income.
Once the property is paid off, anything you earn in rent will be complete profit. That will provide a good bit of security during retirement. It can supplement any benefits or savings that you’re planning to live off once you’re retired.
If you decide to live in that home you’ve been renting out, you won’t necessarily collect any income any longer, but you’ll have a home that’s either paid off or nearly paid off. That’s a lot of peace of mind.
Eureka real estate is worth something. The longer you hold onto it, the more it increases in value. This is simple appreciation. You can nudge the value higher and higher by making upgrades, updates, and renovations from time to time to keep the home looking modern and attractive to tenants. Holding onto a valuable and appreciating piece of real estate without spending a lot of money on it from month to month creates the type of ROI that makes rental investments well worth the money.
Renting out a property means you’ll have to declare those rents you earn as income.
But, you can also enjoy some tax breaks that will allow you to reduce your overall tax liability.
Rental property owners can deduct the depreciation on their homes as well as expenses related to maintaining the property and accessing professional services to rent it out. That means your property management fee is tax-deductible, and so is any money you spend on accounting, legal fees, or insurance consultations.
Maybe you hesitate to invest in a rental property, even while you’re thinking about how it can help you retire, because you don’t want to be a landlord.
We don’t blame you. Renting out a home in California is complicated.
Hire a professional Eureka property manager to lease and manage the home for you. As you focus on preparing for retirement, you’re not going to want to chase down rent payments, fill vacancies, and manage maintenance. Instead, you can partner with a management company to price your rental home, prepare it for the market, find a great tenant, and take care of any routine or emergency maintenance issues.
We can tell you more about using rental real estate as a way to prepare for retirement. Let’s talk about your plans.
Contact us at Rentor. We proudly stand behind our reputation as a locally preferred property management company in Eureka and surrounding areas in Humboldt County.