Can You Retire with Real Estate? Yes, Here’s How!

Investing in real estate for retirement is one of the savviest moves you can make for your financial future. Keep reading to learn about the benefits of this popular wealth-building vehicle, how to use retirement accounts to buy real estate, how to find high-quality properties to support you in retirement, and why turnkey rentals make some of the best retirement assets!

Summary:

• Real estate is one of the best retirement investments, as you can use leverage to buy assets, claim various tax benefits, and get higher returns than the stock market.

• Rolling your employer-sponsored 401(k) or IRA funds into a self-directed 401(k) or IRA allows you to invest in real estate without penalty.

• Turnkey rentals are some of the best properties to own in retirement, as they provide cash flow and tax benefits without the headaches of management.

Why Investing in Real Estate for Retirement Is a Brilliant Move

Real estate can help you build wealth for retirement in multiple ways. If you need another income stream to rely on during your retirement years, a rental property can deliver consistent monthly cash flow (and even more cash flow once your property is paid off!). If you want an asset that gains value over time, an investment property will provide equity growth through debt paydown and appreciation.

Beyond this, there are several advantages of investing in real estate for retirement:

Tax-Advantaged Income

Real estate income is taxed at a much lower rate than many other types of income, thanks to depreciation, interest write-offs, limited long-term capital gains taxes, and other benefits. The last thing you want is to lose a huge chunk of your retirement income to taxes, and rental properties help you increase your income without a huge tax bill.

Ability to Leverage

With stock investing, you can’t put 20% down to buy hundreds of thousands in shares, let alone 5%. With real estate, you can use a mortgage to buy a property and make your available capital go much further. An investment property down payment of just 20% down allows you to buy more assets and increase your wealth!

Did you know Rent to Retirement offers turnkey rentals at just 5% down?

Higher (Overall) Return Than the Stock Market

While returns vary depending on the type of property or stock, real estate has historically outperformed the stock market when you account for all of its investing benefits. Property appreciation plus rental income alone are comparable to stock market returns, but when you consider principal paydown, tax benefits, and other advantages, real estate investing is a no-brainer!

Can I Use Retirement Accounts?

Tired of your employer-sponsored 401(k) or IRA under-performing? While you can’t withdraw these funds before the age of 59½ without penalty, you can roll them into a self-directed 401(k) or IRA and then use them to invest in real estate. The best part is that you only need to withdraw enough funds to cover your down payment and closing costs. You can get a mortgage for the rest!

Just keep in mind that you can’t buy a home for personal use. Retirement account funds can only be used to purchase an investment property!

The Best Retirement Real Estate? Turnkey Rentals

If you want properties that don’t require a lot of work in retirement, you should consider turnkey rentals. Here are just a few reasons why turnkey rentals make such great retirement assets:

Fewer Repairs Than Regular Rentals

Because turnkey rentals are newly renovated, they require less maintenance and fewer repairs than the average rental property—especially during the first few years of ownership. A lower maintenance expense means higher cash flow for you!

Low/No-Headache Property Management

Property management is a necessary evil of real estate investing, but when you buy a turnkey rental, it is actively managed for you. This means that you don’t have to deal with tenants, maintenance requests, and other issues.

Day One Cash Flow

Many properties must be renovated, rented, and stabilized before they can start making you money. But, most turnkey rentals cash flow as soon as you close since they are recently built or renovated, already rented, and already managed!

Check out our cash-flowing turnkey rental properties for sale!

Walk-in Wealth with Build-to-Rent

Build-to-rent turnkey rentals are new construction homes that you can immediately rent out for a profit, and these new builds will often appraise for more than you purchased them for. This difference in value is free equity that boosts your net worth!

Tons of Tax Advantages

Even with all the above advantages, you still get the classic tax benefits of real estate. These include rental property depreciation, income write-offs, property tax and insurance deductions, and the ability for long-term capital gains to be taxed at a lower rate!

How to Find the Best Rentals for Retirement Income

Not every rental property is a good retirement asset. Take the following factors into account when looking for properties to buy:

Look for Growing Areas

Rental markets with steady population and job growth are less risky for investors and typically deliver the best returns. These areas have higher rental demand, home price appreciation, and rent appreciation!

Check out our list of best states to buy rental property!

Work with Investor-Friendly Agents/Turnkey Providers

The average real estate agent works with homebuyers, not investors. Instead, find an investor-friendly agent or a turnkey provider like Rent to Retirement that specializes in working with investors to help them retire with real estate.

Cash Flow, Appreciation, or Both?

Before you buy, you should determine which type of property will meet your retirement goals. If you plan on retiring soon, investing for cash flow may be your best bet. If you’re retiring in 10 years or more, appreciation could be a game-changer for you. Rent to Retirement has turnkey properties that deliver both!

Retire Sooner with Real Estate

Whether retirement is right around the corner or decades away, investing in real estate is a smart short-term and long-term play. Rental properties can give you another source of income today, grow your net worth for tomorrow, and propel you to retirement much faster.

With turnkey real estate, you can get the cash flow, appreciation, and tax benefits of regular rental properties without taking on another job in retirement. These assets are more passive than self-managed rental properties, so you don’t have to deal with tenants, maintenance, and other headaches!

Investing in Real Estate for Retirement FAQs

Is Real Estate a Good Investment for Retirement?

Real estate is one of the most tried-and-true ways to earn money in retirement, with higher overall returns than the stock market when you account for not just rental income but also property appreciation and tax benefits. You can live off monthly cash flow, grow your nest egg through equity growth, or both!

Is It Better to Invest in Real Estate Than a 401(k)?

By rolling your employer-sponsored 401(k) into a self-directed 401(k), you can do both! Self-directed 401(k)s and IRAs allow you to invest in real estate without penalty, plus you can still contribute to the account and allow your funds to grow.

What’s the Best Real Estate Investment for Retirement Income?

Turnkey rentals are some of the best real estate retirement assets. These properties deliver steady cash flow and various tax benefits without the headaches of finding tenants, marketing the property, or handling maintenance requests.