How to Build Your Pension Plan by Owning and Running a Few Rental Properties
How do you choose to spend your retirement? Relax perhaps, absorbing the sweetness, aroma and flavor of the world. Although your retirement plan does not have many holidays in it, I bet this is a time when you want to relax and enjoy your years of inactivity.
But there is a downside: to have this life completely free and restored to your hands, you need enough money when you retire! Here comes the need for a pension plan that covers all the cost of living retirement, and frankly, this has been a nightmare for those who are about to retire soon.
Back in the day, companies were known to guarantee certain retirement benefits for their employees (such as salaries), but many of the pension plans available today will offer pre-determined amounts to your pension account for retirement benefits. Is saving someone’s money on a 401K retirement account a good decision?
The Drawbacks of Saving for Retirement
Setting aside money for a 401K account may seem like a safe bet, but it may not give you the life you want after retirement.
Even if you save 15% of your monthly income for 30 years (most people can’t beat this level), after fixing inflation, you will be left with less money! Of course, this person would not be able to enjoy a visit or the good things of life in old age. Sadly, for this reason, many workers postpone their retirement and choose to work longer years.
A Wiser Retirement Model?
Some retirees consider investing in bonds and stocks as part of their retirement savings plans, but one wise way to consider running a few rental properties as a pension plan. How do you manage rental properties as a responsible entrepreneur before retiring?
Creating a Workable Plan for Retirement: Manage Rental Properties
If you want to have enough rental income, your plan should be the owner of $ 1.5 million in real estate outside the house you live in, when you retire.
Suppose you can buy your home at the age of 25 and then buy a second, third, fourth and fifth place for 5 years i.e. 30, 35, 40 and 45 years respectively; each of them with a reduction of 25 or 30 years.
The rent collected will cover all costs including property taxes and maintenance, and the only thing you have to contribute to your money may be a small portion of the monthly mortgage payments.
If you are able to do this consistently, by retirement you will have four rental properties (total $ 1.5M), and after deducting maintenance costs, you will be left with an annual income of $ 50,000 (depending on today’s value). And if you were to pay the full amount of the loan, that would mean that you would have to pay back the loan. If you need more income, you can sell any of your properties.
While the process of setting up your real estate can be very difficult, it is always helpful to work with experienced real estate agents who offer a refund to their commission, as the total amount you can spend will be this small.
Retirement can be a wonderful time to relax and rejuvenate if you make the necessary plans for it. By having fewer rental properties, you can eliminate financial worries in your later years.