Regardless of your age, owning real estate is a smart move. However, owning real estate in retirement is incredibly rewarding. 

Owning rental property is a great way to diversify your income and help boost your savings. 

The Benefits of owning real estate

If you are retired and searching for ways to increase your income, here are some reasons investing in real estate could be a sound move. 

Owning Real Estate Can be Passive Income

Many people think of rental property and assume it will be a lot of work; while it can be, it doesn't have to be.

If you don't want to be involved in the day-to-day duties of real estate, hire a property manager. 

Property managers handle the daily duties of rental property, from showing the home and screening to collecting rent and ordering repairs. 

Hiring a property manager means less income; however, you will still benefit. Typically, property managers charge between eight and 12 percent of the property's rental value, along with some additional fees. 

For retirees looking for a part-time gig, lose the property manager and do it yourself. Owning rental property is rarely a full-time job.

Owning Real Estate is an Investment

Owning real estate is a wise investment, especially if you have no intention of selling soon.

Historically, most homes have increased in value over the years. Speak to your real estate agent about the history of different areas to determine what home appreciation has looked like over the past several years. 

An experienced agent will help you find the best areas to purchase real estate as an investment. 

Owning Real Estate Means Extra Money in Your Pockets

The primary reason people own rental properties is extra income.

You will generate enough monthly money to cover repairs, taxes, insurance, and a property manager (if you choose). After all those things are taken care of, the rest is your profit.

You may wonder how much money you can make on an investment property. Although there is no way for you to know that until you purchase the property, determine the rent, and find a tenant, let's play out a scenario so you can get a general idea.

You find a rental property. You decide to charge $2,000 per month; this means the property will make $24,000 per year.

To be safe, set aside 30% of the income for insurance, taxes, and potential vacancies; that is $7,200. That means you will have $16,800 per year, which equals $1,400 per month.

Of course, you must deduct the mortgage from your profit if there is one. Owning one rental won't make you a millionaire, but it is passive income and can lead to more real estate purchasing. 

The Bottom Line

Becoming a landlord is not everyone's cup of tea. However, if you are looking for a simple way to earn passive income, rental property can be a great solution to increase your earnings. 

Contact us if you are interested in learning more about real estate investing!



The Glass House Real Estate Team

The Glass House Real Estate Team

We are passionate about empowering home buyers and sellers. Our team brings a wealth of knowledge and experience. We will help you seamlessly navigate the home buying or selling process stress-free.