It is important to plan for your retirement. Most people need more than social security and a small pension to live on when they retire. This is why so many people retire from their jobs and then wind up working in some fast food restaurant. If you don’t want to wind up like that, you will need to make sure that you have a retirement plan.
Part of your retirement plan can and should include real estate investments, and now is a great time to get into them. With interest rates ultra low, but the economy still supporting fairly high rental rates, now is a great time to invest in real estate for the purpose of becoming a landlord. You can easily charge up to twice your mortgage payment for rent if you buy real estate now with low interest rates. The average mortgage payment on a $100,000 home on a thirty year mortgage is under $500 per month. A three bedroom home in the suburbs can be found for around that price, and can be rented for an average of $700-800 per month, depending on location. That gives you $300 per month additional income that you can use to save toward your retirement.
In addition, the real estate investment continues working for you long after you make it. Even after you retire, that property will be making you that $300 per month income as long as you own the property and keep tenants. This means that you have added $300 a month to your retirement income, in addition to whatever you are able to save from the rental before you retire.
Now, consider what this would mean for your retirement plan if you were to get more than one real estate investment. What if you had two rental properties running at the same time? This would give you up to $600 a month or more in additional income. Make it three properties, and you have enough income to pay your own home’s mortgage as well as your utilities. This frees up your other retirement income and your savings for doing the things you always dreamed you could do in your retirement.
All in all, it is easy to see why real estate investments and becoming a land lord are so appealing, especially now while interest rates are at an all time low. If you have more than fifteen years before retirement, you might consider getting a fifteen year mortgage instead. You’ll have less profit after making the mortgage payment now, but the house will be paid off and rent will be pure profit when you retire. This is just one way you can turn the tables on real estate investments and take full advantage of the low interest rates going on right now.