By investing in single-family rental properties, early retirement is not only within reach but also might be as easy as falling off a log. If you have not considered the pros and cons of using real estate as one aspect of your retirement income strategy, you may fail to take advantage of the fast track to financial freedom.
Obtaining marketable properties in Groton and dealing with them efficiently can certainly come to be the most valuable piece of a retirement plan. Real estate is a great way to diversify an investment portfolio, making certain that your entire retirement income is not tethered to a volatile stock market.
It is an established fact that some of the wealthiest people in the United States became affluent through real estate investing. All the same, advances in technology and new business models have empowered even small investors to make use of the power of real estate investing for tangible financial freedom. Real estate usually puts forth more desirable annual returns than savings accounts or even 401k plans and is usually much more stable than stock and bonds. What this denotes is that by investing in Groton rental properties, you are multiplying your investment dollars in prospects you had not explored in before now.
A superb rental property must pay itself off over the life of the mortgage. As a result of the rental payments being used to pay off part or all of the mortgage and other expenditures, being the proud possessor of a rental property costs an investor a small amount outside of the down payment. Any excess rental income can be utilized to replenish those funds or re-invested to grow a retirement fund even more. Rental income can continue indefinitely the moment the mortgage is paid off. Traditionally, rental rates increase progressively annually, which would essentially create an income that keeps pace with inflation.
Simultaneously, a well-maintained property is to be expected to appreciate. This indicates that if you are determined to sell, the property should generate a lump sum payment exceeding the original purchase price. Assuming a 3.4% increase each year, a property would roughly double in value over 30 years, a sum that could then be converted into an annuity and provide an ongoing monthly income for another 30 years.
Ponder over this straightforward illustration: an investor buys a median-priced single-family home and puts 20% down. Monthly expenses would include average maintenance costs, insurance, property management fees, and property taxes. Monthly income would equal the market rental rate for the property. In today’s dollars, the monthly expenses and rental income from a carefully chosen rental property would balance each other out.
As rental rates went up the following year, the property would go from breaking even to positive cash flow, which would only increase in succeeding years. To this extent, rental property investment can indeed pay for itself over the life of the mortgage and then become the starting point of on-going retirement income.
To arrive at genuine financial freedom, it is customary to obtain and supervise more than a single rental property. For most rental property owners, there are alternatives to leverage the equity in your existing rentals to get your desired outcome. Adding investment properties can help you retire earlier than you thought possible and, at the same time, increase your retirement income once you do. There are countless moneylenders out there who can help with real estate investors wanting to own numerous rental properties. Many of these offer excellent services for investors both big and small in scale.
Because of the effort and time needed to oversee a rental property, many people find themselves anxious about long term management. But that thinking is behind the times. Right now, Groton rental property ownership can be hassle-free by hiring the best property management team available.
At Real Property Management Hartford Metro/Greater New London, we find and screen tenants, handle collections and bookkeeping and take care of maintenance and repair requests. We also help maximize your rental income with market assessments and by setting accurate rental rates, ensuring your rental property remains profitable and in good condition for years to come. Contact us online or call us at 860-316-4388 if you have any questions.
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