This blog first appeared in July of 2011 and still has wisdome for today.
Intodayâ€™s economy, it seems that everything old is new again â€¦ albeit with a bitof a twist. Years ago, it was common for older couples â€“ and frequently widowsâ€“ to rent out rooms for extra income. Taking in boarders was a viable way tosupplement income.
Well,the idea is back, with a bit of a twist. As Baby Boomers face the cold, hardfacts of retirement, they are increasingly changing the definition of the termto include at least some form of work. While you may not be ready to hang out ashingle on the front gate, â€œRooms for Rent,â€you might consider becoming a landlord. In fact, the venerable Wall StreetJournalwrites that it may be just the ticket, especially given the uncertain prospectsfor stocks and bonds and the meager interest rates on savings accounts.
Thinkabout it. Itâ€™s a buyerâ€™s market now, so purchasing a multi-family home is morefinancially feasible. And, the trend toward the renterâ€™s lifestyle is pickingup steam. All this means you have a low cost of entry into a market that isexpected to expand. Starting to make investment sense?
Sure,itâ€™s a career of sorts, but you also need to think of it as an investment.Weigh everything in the short term, including start-up and maintenance costs,as well as the marketability of the location youâ€™re considering. But then alsokeep your long-term goals in mind, including appreciation and eventual sale.Buying in a depressed market, after all, is only a steal if that market bouncesback. Finally, donâ€™t overlook the possible danger of having all your eggs inone basket since being a live-in landlord will unite your home, equity, andemployment, into one potentially risky asset.
Likeany retirement move, donâ€™t make this one too quickly. Discuss your plans with aprofessional who can help you sort out the details, including how an investmentrental property could affect your Social Security benefits. Remember, too, thatthis lifestyle may not suit you. In which case, you would be wise to exploreother, more enjoyable options.
For more information on this and otherestate planning subjects, contact IdahoEstate Planning and schedule aconsultation. Remember,good planning is no accident.