Funding 401(k)’s and IRA’s are the norm in saving for retirement. But lets face the facts – there are some people that will never be comfortable putting their money in the stock market.
I know people like this. Their solution? Rental properties.
I have a family member whose retirement will significantly depend on rental income. He has been amassing rental properties for awhile now.
The plan is to have all of the properties paid for by the time he retires so that all rent monies collected are for his keeping. The average rent collected per property is $550.00. With the 6 rental houses he currently has that would bring in $3,300/month minus the cost of property tax and insurance.
On top of this he also has a business that will provide him another source of income. And if you want to factor in social security, then he should be living pretty comfortably in his golden years.
You could say that his amassing these rental properties could be a wiser move than him working his ass off and stashing his hard earned dollars into a questionable market.
These properties have cost him nothing! The rent that he collects is at least $200 more than the mortgage payments. The renters pay the mortgage along with the property tax and insurance just by paying their rent. All he did was search for bargain properties and sign a couple of papers at the bank.
The rent money will have paid these houses off by the time he retires.
Of course there’s always some sort of risk that comes with every investment. If a renter doesn’t pay, then he has to. If their are problems with the houses then he is obligated to fix them, which could cost a lot of money.
There’s also the struggle of finding a good, reliable renter.
Even if he decides he’s done with the hassle of renting, he could always sell. Either way he will end up with a considerable amount of cash.
You don’t have to fit the norm when planning for retirement. There are risks that need to be weighed with every type of investment. Do what you know and what you feel comfortable with.
Just remember that there are many options to become financially independent.
Are rental properties part of your retirement plan?