Saving for retirement doesn’t mean investing only in the stock market. As you get closer to your planned retirement age, it becomes more important to find stable and reliable sources of income for your retirement, so you can continue to enjoy the life to which you’ve become accustomed. Real estate is often a fantastic option for individuals seeking a reduced-risk investment and income-producing tactic. At Black Harbor Wealth Management, we often get questions about investing in real estate. Today, we’ll look at some of the pros and cons of owning investment properties.
- You control and manage this asset completely. While you can hire a property management company, you still have the ultimate control over the management and handling of your property.
- When you lease the investment property, you can rely on regular, monthly payments from the tenants, giving you a continual income stream as long as the unit is occupied.
- Since properties are insured against damage, your investment is protected. If your property is lost in a fire or other catastrophe, your insurance company will help compensate you for the damage. With stocks and other investments, you may lose money overnight if the market plummets.
- You may receive tax benefits as a property owner, offsetting the amount of taxes you owe at the end of the year.
- Real estate prices and home loan interest rates vary from month to month, based on market demand. If you try to resell your property, there is always a risk that you’ll lose money if the real estate bubble bursts.
- Maintenance can become expensive. Depending on the age of the home and the tenants occupying the property, you may find yourself spending more on maintenance, greatly reducing your monthly income.
- Poor credit can bar you from qualifying for a home loan, making it difficult if not impossible to secure an investment property.
If you wish to discuss how investment properties can help you build your savings for retirement, contact us today!