Dial Down Risk for Retirement

Denver has a Vibrant Rental Market, especially Single Family Homes

Many years ago I was introduced to a retirement planning tool where you bought rental properties and held them until paid off. Then use the equity to buy more all the while allowing the rents to make the payments. In Denver with rents the way they are and interest rates as low as they are, this is a great strategy. When you are done reading this blog, call so we can visit about your plans.

There is certainly no shortage of retirement planning strategies available to individuals who actually take the time to consider them. What most financial experts do agree on is that the closer you are to retirement, the less time you have to recover from a loss. For that reason, many people start dialing down their risk factors as their age increases.

Denver Real EstateOne way to minimize risk is to invest in things that you know and understand. For the majority of homeowners, their largest asset is the equity in their home which they generally have more familiarity than other types of investments.

Buy the home you’d like to retire to today and use it as a rental property. Finance it with a 15 year loan so it will amortize quickly and possibly be paid for at retirement.

Continue living in your current home until you’re ready to move into the home you’ve designated at your retirement home which will not create a taxable event. Prior to moving in, you can rehab the home so that it fits your style and needs exactly.

If you’ve lived in the current home for at least two of the last five years, you can exclude up to $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers. The proceeds could then, be invested for income.

Some of the attractive features of this proposal is that you’re familiar with the operation of a rental due to similarity of owning a home. Most experts agree that home prices will continue to rise and so will rents. The maintenance people that you use for your home can also work on your rental. If you don’t want to deal with tenants that can easily be delegated to a property manager. Low mortgage rates with short terms and high rental values contribute to positive cash flows that will pay for the property.

Obviously, there are many other considerations you’ll want to investigate with your tax and real estate professionals these can get the conversation started.

Call Pete to get the process rolling: 303-880-5585 ext 3.

If you enjoyed this post, make sure you subscribe to my RSS feed!

About Pete Doty

As a Realtor® Pete has been working in the Denver residential market since he first started in 1985, and focusing primarily in the south end of town. He finds the client the home they want, and then help them sell it when they want to move. Marketing is really where his heart is, and making sure his clients’ interests are watched over in Littleton, Highlands Ranch, Parker, Castle Rock, Centennial, Englewood, Morrison or Denver. His web site www.DenverRelocation.com ranks high in search rankings and generates numerous relocating buyers each year. Talk to Pete for a unique perspective on today's real estate market in Denver.
This entry was posted in Denver, Denver Real Estate, Denver Realtor, Highlands Ranch and tagged , . Bookmark the permalink.