Real Estate Property Management has it’s own challenges. How Can You Make an Excellent Investment for Your Retirement.
The good news is that most people are living longer and healthier lives than at any time in history. The less welcome side of this is that putting an adequate pension plan in place is more important than ever yet harder to achieve as the number of years it needs to cover increases. Traditional investments such as the 401K still have their place, of course, but it’s always sound advice to build a mixed portfolio. A prime candidate for long-term investment is property, but with that ownership comes real estate property management considerations. Here are seven compelling reasons to consider property as part of your pension planning.
Better Returns for the Risk
If history is any guide at all, nothing beats real estate for dependable appreciation over the long term. Although there is a cycle of property price rises and falls (and currently prices in many areas remain depressed), the underlying value has always increased with time. Historically, well-managed real estate shows an excellent balance of risk and return, compared to investing in stocks, for example.
Few pension plans offer anything of real, solid value outside the intangible realms of paper money. Financially based investments can go down as well as up, sometimes dramatically so, and although there are products available which guarantee at least some return, the price paid for this security is lower performance. In contrast, real estate retains an integral value which isn’t quite so subject to the whims of the financial markets. People will always need somewhere to live, and a well-chosen property will hold its value across anything but the worst financial turmoil.
Even if you’re buying property primarily as a pension investment, there is the opportunity to earn income from it during the meantime. By renting out the property, you can use the resulting rental income to pay its mortgage, invest elsewhere, or simply to make your life more comfortable. Either way, property offers the prospect of earning continuous income while building a valuable asset for the future.
For a reasonable fee, you can hire a real estate property management company to handle apartment rentals and the upkeep of your property in the years before you retire, making this an exceptionally hassle-free way of investing. You don’t need to keep an eagle eye on global markets while worrying about the performance of your individual investments.
Straightforward and Understandable
Annuities and other retirement plans can be arcane instruments, and in many cases, you’re relying on your pension adviser to make sense of it all. In contrast, property is a straightforward investment, and paying attention to average prices gives you a clear idea of where you stand at all times.
Easier Access to Your Capital
Even if you invest in property for the long term, you have the option of selling it at any time, whether or not you’ve reached retirement. Few investments offer such easy redemption before the expected maturity date — although of course you’ll need to find a buyer.
Unlike an annuity, a property can be passed on to your family, either as a bequest or a gift. Everyone hopes for a long, happy, and healthy retirement, but it’s good to know that your family members will be the ones who benefit if the worst happens, rather than the coffers of an insurance company.
Given the importance of proper retirement planning, discussing your options with a fully qualified adviser is always the best option. Nonetheless, if until now you’ve only considered investing in traditional pension plans, maybe it’s time to take a closer look at the possibilities of property.