Should you invest in real estate as part of your retirement plan? It’s a good idea, but you need to make sure it’s right for you.
Should real estate be part of your retirement plan?
Actually, including real estate in your retirement plan is a great way to diversify your portfolio. Most financial planners agree that diversification reduces the risk in your retirement plan.
However, investing in real estate may not be right for everyone. It does require you to set a lot of money aside in case something happens in the property. For example, the air conditioning may go out, you could lose a tenant, or you may need to take care of deferred maintenance items. When you invest in real estate, you need to have an emergency fund to take care of those things.
Real estate is a big commitment. Unlike other kinds of investments, real estate is not necessarily liquid. It can be difficult or expensive to get rid of your real estate investment.
So, before you take the plunge, make sure you do your research. First, find out how much money you need to put down. Also, decide who will manage the property. If it’s a local property, you may be able to manage it on your own. If the property is in another city or state, then you need to find someone you trust to manage the property for you.
If you have any other questions about investing in real estate, just give us a call or send us an email. We would be happy to help you!