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Real Estate as an Investment for Retirement

home-1353389_640The general consensus seems to be that by the time you reach retirement age, or 65, you should have about $800,000 in savings. The thing is, there are many households who don’t have any type of formal retirement plan at all. This means that they are not aware of what it takes and how much retirement will actually cost. It can seem like planning for retirement is something that is insurmountable, especially when you are young, but it really doesn’t need to be too difficult at all. While you are young, you don’t really need to have a plan that is too detailed, but you should still have a plan.

There are all sorts of infographics regarding retirement, but this one seems to hit the nail on the head when it comes to laying out a lot of the options. That being said, it doesn’t even touch on using real estate as an investment for retirement.

Paying for Your Retirement with Rental Income

There are people out there who swear by investing in rental real estate properties as THE way to create that retirement nest egg. In essence, here is all that you have to do:

  • Purchase a property
  • Find someone to rent it to
  • Collect the income as the tenant pays for the mortgage

In fact, this can be a good investment. You can generate income with rental properties. If you have a unit that is well located, you can make an additional $200 – $1,000 each month after expenses. One of the best ways to make real estate investing easier is to start a real estate investment club with your friends. Share the work of real estate analysis while everyone enjoys the returns.

Reverse Mortgages

Getting a reverse mortgage is another option. Right now you may be asking: what is a reverse mortgage? It’s a kind of mortgage where the owner of a home can borrow against the value of it. This mortgage is not to be repaid in the traditional sense until the home is sold or the borrower dies.

A reverse mortgage provides elderly people with money that they can use in their retirement years. The advantage of this type of mortgage is that the credit of the borrower is not even relevant, and many times, doesn’t even get checked, because of the fact that the borrower will not be making any payments on the mortgage. The home itself is the collateral and when the borrower dies, the home will be sold to repay the reverse mortgage. Although, there are some cases in which the heirs will have the option to repay the loan to forestall the home being sold.


There are still many other retirees who look at their homes in a different way as a major source of income for their retirement years. If you have decided against a reverse mortgage, yet still want to use your home to fund your nest egg, you can always sell it. If you want to get the most money for it, and who wouldn’t, there are a few things you can do.

  1. Get that curb appeal. Spruce up the lawn and driveway to make it look more homey to potential buyers.
  2. Get rid of the clutter. Tone down whatever your style is to one that is more neutral inside the home.
  3. Get those minor repairs taken care of.
  4. Modernize the bathrooms and kitchen.
  5. Talk to a variety of realtors.
  6. Price it to sell.
  7. Have an open house and stage the home for it.

As you can see, there are a few different ways that you can leverage real estate to your advantage when it comes to retirement. One last opportunity we haven’t talked about is real estate crowdfunding investing, a new way to invest in real estate without all the hassles of direct ownership.



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