26 Jun Investment properties as a source of retirement income
As you near the age of retirement, you start to think more seriously about income. Do you have enough retirement income to allow you to live comfortably through your retirement years? People are living longer than ever before, and financial advisors are telling their clients to plan for 20 to 30 years of retirement.
If that number takes you by surprise, you may need to add to your retirement portfolio. Real estate investments can be a good source of retirement income to supplement your retirement savings plan. Income-producing properties, such as rentals, are a very popular investment. These properties can include residential homes, vacation rentals, apartments, duplexes or even commercial office space.
When looking for an investment property, location is key. For instance, any residential homes or apartment units should be in an area with desirable amenities modern renters are seeking such as good schools, shopping centers and transportation. Areas with low property taxes are also very attractive to potential renters.
There are other things to consider before deciding to buy an investment property. Typically, lenders require at least a 30% down payment if the buyer is not going to occupy the property. There will also be ongoing operating expenses and maintenance costs, including new roofs, paint, HVAC repairs, plumbing, landscaping, etc. Tax considerations also play an important role in the income you can expect to make from an investment property.
Rental properties can generally be claimed as a depreciation deduction on a federal tax return. The best idea is to consult with an accountant before purchasing an investment property to go over tax liabilities and benefits.
If you’ve found an investment property and are ready to make a purchase, be sure to contact Barsh and Cohen to help with your closing. We process real estate closing documents professionally and at a reasonable rate. Contact us for a consultation.