Turnkey Real Estate Investing for Retirement

More Americans are focusing on alternative income sources to create financial security throughout retirement. 

Saving for retirement is tricky. Unfortunately, retirement isn’t on most American’s radar until they are well into their 30s or 40s. According to the U.S. Government Accountability Office, the average American between the ages of 55 and 64 only has $107,000 saved for retirement. If placed in an inflation-adjusted annuity, it would produce a monthly payment of just $310. This is a far cry from the tens of thousands of dollars needed to maintain a typical standard of living while balancing ever-increasing medical costs. The constant volatility of the stock market leaves many investors, particularly those nearing retirement age, to more stable assets. How does someone create financial security during their golden years?

By investing in rental properties, an investor can develop passive income streams that protect against potential market volatility. 

With the rental market booming, more and more investors are diving into turnkey real estate investing for retirement. The particular benefit of a turnkey property is the ability to diversify your portfolio without having to actively manage a rental, as Daniel Kurt, describes in a recent Investopedia article:

“These properties can be an attractive option for those looking to diversify their assets without encountering the day-to-day hassles of being a landlord.”

As you near retirement, you should have a variety of investments that can protect you in the event of a downturn. Real estate can provide you with a physical asset that will always hold value, even in a bear market. 

Rental properties that are renovated and rented are a win-win option for retirement investment. 

The two most significant risks of owning a rental property come with extensive, unexpected repairs and devious tenants. Purchasing a turnkey property together with property management helps to mitigate both these risks. By renting out a recently upgraded unit, you reduce the risk of significant repairs that can negatively impact your overall return. 

By utilizing a turnkey real estate development company, you have the combined experience and knowledge of experts at your disposal. Not only do they assist in the search for undervalued properties, but they also perform property management to find reputable tenants and perform regular maintenance. This can be a dream for individuals that prefer a “hands-off” approach to real estate investment.

Turnkey rentals create a domino effect of long-term wealth-building strategies. 

When you invest in real estate for the long-term, historically, values always increase. Your initial investment basis stays the same, allowing you to enhance your net worth further every month. Through rentals, you enjoy cash-on-cash returns, like a more dependable dividend that can help you establish financial security throughout your retirement. After building equity, you can cash out, refinance, and reinvest in a new property. Real estate, particularly turnkey investments, are a great way to grow your wealth exponentially. 

How do you begin to invest in turnkey rental properties? 

When you are seeking to diversify your retirement portfolio through turnkey real estate investing, there are a few things to take into account. Aside from the initial purchase, another crucial aspect is the holding period. Thomas Roussel, author for 1031 Crowdfunding in a recent article, explains:

“A holding period is simply the period of time one owns an asset before disposing of it…. Investors may hold an asset for an extended period so that they are taxed on the profits at capital gains tax rates rather than regular income tax rates.”

The holding period also may vary depending on your lender. An experienced turnkey development company can help you determine the optimal holding time and connect you with lenders who can guide you towards the right loan choices. 

Above all, when looking for turnkey real estate opportunities for retirement, it is best to start early. While there is money to be made in the short-term, the most successful investments mature over time. The benefit of real estate is the variance of local markets. It is always a great time to take advantage of up-and-coming areas of the country that contain prime opportunities. Make sure to utilize all tools at your disposal, including property development companies that can help identify and manage the best potential rental properties. 

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