When it comes to planning finances for your retirement, the possibility of not having enough money to retire comfortably due to low-income or stock market volatility has become a feasible threat, so we wanted to show you how real estate can be a strong option in order to obtain a continuous return on investment from a highly stable and secure rental market.
Buying a house can be a good retirement plan because, in addition to receiving money from the rent, the owner can benefit from a possible revaluation. However, you have to count on expenses, lack of liquidity and the possibility of defaults. The owner has to have enough ‘financial air’ to breath and to pay off the debt without counting on the rent generated by the lease. Another issue is taxation, in this case, proper planning can help us reduce the impact of taxes on an asset.
If you decide to invest only in real estate, the best decision, as advised by experts, is to buy a flat to rent that gives you the highest ROI, homes in large prime urban areas aimed at upper-middle-class people with high annual incomes are the best investment. In the case of renting in tourist areas, bear in mind that you run more risks, as they only have a seasonal influx and you would lose profitability during the months that remain empty.
Despite the previous crisis, housing should be included in a diversified portfolio of investments, as it is the key to losing as little as possible. In this way, depressive cycles can be resisted by offsetting profits with other financial products or derivatives.
Investing in Real Estate, Better than Saving
Many people are taught the habit of saving, however, to see the money grow, conservation is a terrible option. This is because money gets devalued and interest rates on savings accounts are not very high, and if inflation beats the fixed term, you will end up with less money than you had before.
As mentioned above, real estate is a long-term investment that will make you generate capital in the future, so it is the ideal plan when thinking about retirement as it is much more effective than just saving. Weak currencies are affected considerably in times of crisis, especially when compared to dominant currencies such as the dollar and the euro. Properties, on the other hand, revalue themselves.