My career took off after my kids started school and I was finally able to start saving for retirement with my company’s 401k plan, but it happened a little later in life than I had hoped. Each paycheck, I scrutinized the deduction and, even though my employer matched my contribution, the numbers just weren’t adding up fast enough. I knew that it wasn’t going to be enough to live on comfortably when I finally retired. I felt dread knowing that I couldn’t squeeze any more out of my salary.
It’s not just me—most women face a retirement gap. First, we are living longer lives and are more likely to outlive our spouses. On top of that, we often take time out of the workforce to raise children and have fewer working years to save as a result. Building a part-time side career in real estate investing is helping me to bridge that retirement gap and gain more confidence about my future financial security.
Reasons to Invest in Real Estate for Retirement
Understandably, many were a bit shaken after the housing bubble burst, but the good news is that housing prices have stabilized and even gotten stronger in some areas of the country since then. This happened because there are so many advantages to putting your money in real estate:
- Stability. Compared to investing in stocks and bonds, real estate is a tangible asset and provides less market volatility. Since you are in charge of the investment—unlike your IRA or 401k—you have more options to manage it. In a buyer’s market, for instance, you may choose to hold the property as a rental.
- Portfolio Diversification. Because real estate doesn’t respond to the same ups and downs of the stock market, it can be an effective way to lower your overall investment risk exposure while providing comparable, or even better, returns.
- Cash Flow. Whether you choose to sell or hold the real estate asset, it can provide solid cash flow. Selling puts a chunk of cash in your pocket in the near-term, which can then be used toward another investment to grow more retirement savings. Renting it out provides less immediate cash but can pay off the mortgage over time while the property may appreciate over time.
- Tax Advantages. There are extra federal tax deductions you can take when buying and selling real estate. From property improvement to debt interest and state taxes, there are a lot of potential write-offs. If you hold the property for over a year, you may even be able to deduct depreciation. For investment properties that you buy and sell more quickly, there are ways to defer capital gains through a 1031, which involve rolling the profits into another investment. You should always consult with your tax professional about these matters, but just knowing they are out there is a good first step toward gaining on your investments.
It’s Easy to Get Started in Real Estate Investing
You don’t need any specialized knowledge to begin investing real estate. Women and men with all sorts of career backgrounds have turned to investing. In fact, if you own your home, you already know the drill. Many new real estate investors start off just part-time, but when the cash starts flowing, they decide to quit their jobs and make real estate investing a full-time career. The best part is that you can continue to invest even after retirement to further boost your later-years lifestyle.
Now, I will admit that there were some challenges when I first decided to start investing in real estate to expand my retirement plan. Initially, I began by reading books on the subject, but they just offered advice—not the tools I would need to be successful. I also went to a seminar about investing and, let me tell you, it wasn’t worth the time or money! Basically, it was a scam to get me to buy more books that would tell me the same tired advice I already read.
That’s when I found HomeVestors® and became a franchisee. HomeVestors gave me solid training on how to utilize their “We Buy Ugly Houses®” national brand to help buy properties from homeowners who find themselves in “ugly situations.” Leveraging the trusted brand name, marketing, and proprietary tools to evaluate investment opportunities, along with the guidance of a mentor, all gave me the help I needed to get started. Now my retirement accounts are growing at a pace that makes me feel assured that I will be secure in the years to come. If you are ready to create some extra financial stability for your retirement too, reach out to HomeVestors and find out more.
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