How to Earn Retirement Income as a Landlord

It used to be that we worked our lives away only to stress and worry that we didn’t save enough money for retirement. Many of our parents and grandparents were left hoping that a combination of their Social Security, savings, and (hopefully) a pension will get them by during their golden years. That doesn’t have to be the case anymore.

Learning how to earn retirement income as a landlord can improve your financial future and help you avoid the typical stress of not having enough money to live comfortably in retirement.

Let’s face it, Social Security doesn’t provide much security at all, and many of us don’t even have a pension at our work. We need to be more proactive in the preparation of our financial future in our retirement years.

Earning Retirement Income By Being a Landlord

While to many of us, becoming a landlord may seem like a pipe dream, it is not as tricky as you might think.

Once you learn how to earn retirement income as a landlord, you may not only find yourself retiring comfortably, but you might find yourself able to retire earlier than you expected.

Anyone else on board with this idea?

Here are some of the benefits that come from learning how to earn retirement income as a landlord:

Comparatively Small Investment in Relation to Income

You can take out a loan to buy an investment home and only need the investment of a down payment.

Yes, you can use savings and buy a house outright, but that would likely mean draining your savings. This would mean that the entire monthly rent payment would be considered income to you.

However, if you don’t want to drain your retirement savings, you can get a home loan for your investment property. This means that you need a down payment and other miscellaneous money to invest.

Compared to the income potential of becoming a landlord, this investment is relatively small.

You Don’t Need to Constantly Sell Your Assets

It used to be that you would invest in the stock market and then sell off stocks as you needed. Sure, you could reap the benefits of the interest received from those investments, but how far did they really go? No more of that.

When you own rental properties, you don’t have to sell these properties at all. You get to sit back and enjoy those rental incomes month after month without the hassle of selling.

You can sell at some point if you wish, of course, but bringing in that monthly income and enjoying the benefits of your property value growing over the years is the real goal.

Just make sure to safeguard your investment and compare landlord insurance. That way your asset is covered if something awful should happen.

It’s Easy to Forecast Your Returns

Forecasting the income that comes with your rental properties is far different from predicting the revenue based on the stock market. You can make far more educated assumptions about the rental market in the area than you can about the state of certain businesses.

I’m assuming you already own a home, so you are likely already aware of the expenses that come with property ownership. Hence, it’s easy to know what type of money needs to be set aside for emergencies, etc.

All of this experience and knowledge help you see the returns that could come from having rental properties.

Tax Advantages

There are tax advantages to being a landlord that will prove to be beneficial in your retirement years.

As a landlord, the maintenance expenses, property management fees, legal forms, insurance, mortgage interest, and more are all deductible from your taxable income.

Inflation Won’t Hit Quite as Hard

Rent prices typically go up with inflation, so you don’t have to worry about your income staying the same while everything else goes up.

Your Net Worth Will Grow

Learning how to earn a retirement income as a landlord is beneficial to making your net worth grow.

As a general rule, property tends to increase in value. Investments in the stock market can always ebb and flow, but real property tends to maintain a value and continue to grow as time goes on.

Becoming a Landlord is a Great Way to Diversify Your Asset Types

We all know that it is important to have more than one form of assets/investment, right? Stocks are great but can be volatile. Your typical savings are safe but don’t have the return that is required for a comfortable retirement.

The key is to have a mix of different savings, income, and investment assets for the best return and income potential in your retirement years. Becoming a landlord shouldn’t be your only retirement plan, but it can definitely go far toward helping you reach your retirement goals.

When learning how to earn retirement income as a landlord, you need to recognize that there are risks like any other investment. However, there are ways to minimize these risks, such as tenant screening and security deposits.

Are you a landlord? What advice do you have for someone looking to start investing in rental properties?

Home Jobs By Mom

Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.