How To Use Real Estate To Boost Your Pension Fund
51% of women and 41% of men are excited about the prospect of retirement. It’s the time to finally rest after participating in the workforce for 40+ years. While you should certainly enjoy your golden years, you could also use the time before or during retirement to incorporate real estate earnings into your pension fund.
Renting Out Your Home
One of the easiest paths homeowners can take is to downsize the items they own and rent out the rooms in their house. This would be especially useful if you know you won’t have family members living with you and you don’t mind sharing your space, and is a great option for those who are self-employed and want to boost their retirement fund. Companies like Airbnb have been making strides in this field, and if you’re not approaching retirement quite yet, you can pay off your mortgage faster by renting out rooms. You can make the process more attractive to potential tenants, such as by not requiring a security deposit since you also live in the space, in addition to setting house rules, such as quiet hours after 9pm. Some people have earned almost three times the amount it takes to pay for their property annually in the amount of rent they’ve earned.
The Buy-To-Rent Path
Another popular option for people who can afford it is to buy a property then rent it out to people. This is especially popular if you can afford a house in places with constant turnover, such as in New York, San Francisco, or a college town. Another option is to buy property in other countries with beautiful scenery and lesser currency value, such as Mexico or Indonesia.
Buying a house means you’re essentially running a business in which tenants are the clients and the living space is the product. As the entrepreneur/landlord, you’ll have to not only invest in the house’s upkeep, but ensure you can quickly fix any problems your tenants might have with the space. Be sure todo your research beforehand, as there are plenty of horror stories to learn from on the internet. However, since the tenant is renting out the whole space without you in it, you can upcharge rent a bit more and earn a profit that way. Be sure to check-up annually on the property to ensure tenants are keeping it in good condition.
This path offers the most reward for the risk. When you buy a clunker of a house, you have to invest your time and energy in its transformation — only to have no one buy it, and potentially enter economic downturn. However, if fortune nods in your direction, you could sell a flipped house and potentially amass $30,000 to put in your retirement fund. While a lump sum option may seem nice, the option is not sustainable, and you could find yourself using that money for purposes beyond retirement.While there are several options available to those wishing to boost their savings for later life, sustainable income from rental properties would be your best bet to consistently bolster your retirement fund.