- Real Estate
Planning for Your Retirement - Buy Real Estate
I Should Have Invested in Real Estate
People are Living Longer
#1 Most people do not plan for the extended ages that most seniors are living to in today's world. Look at Walmart, the age of the Greeter is probably older than most people lived a generation ago. The Baby Boomer generation is health conscious and fitter than previous generations and the benefit of longevity may be a burden to some seniors if they do not plan their retirement accordingly.
Run Out of Money
#2 Inflation erodes most peoples saving away at an astonishing rate when you consider that many seniors maybe retired for over 30 years. That substantial nest egg can disappear in a hurry if you are not doing anything to protect your investments.
Your property taxes may only go up 3 to 5% a year, which does not seem like much when looked at yearly. Your expenses and increased payments are compounded over the years, and like your mortgage interest lasted for a lifetime, the end result can be scary if you live long enough.
Cost of Living
#3 The cost of living is constantly rising. Taxes, insurance and all the necessities of live are constantly being increased. Politicians are constantly spending and creating new programs and the taxpayer is the only source of income.
Canadians are aware of most of these facts due to the late finance minister who raised the retirement age, putting an added burden squarely on those taxpayers who had faithfully paid into a the Old Age Pension Plan for most of their working career. Our government, due to financial mismanagement, raised the eligibility of the Old Age Pension to 67 from 65 to keep funding levels up at the expense of those workers.
Saving accounts and other bank investments will pay a whopping 1.75% interest to those people who need to have the security of investing money with a financial institution. With the high cost of taxes, property taxes, heat and hydro and other monthly expenses you can see how your nest egg can be plundered leaving you in an impoverished state.
Most seniors are scared of investing in the stock market and they only have to look back as far as 2008 to see what can happen to some investments. Stocks are a good investment strategy when they pay off, but no one will hold your hand if things go south and money is lost. Although most stocks do recover their value once financial crises pass, your stock is not guaranteed to be one of these.
Real Estate on the other hand is what I consider the ideal investment for retirement. In the history of Real Estate there has never been a downside to good investing. Unless you are buying in a one horse town with one employer planning on closing shop, real estate is the investment vehicle of choice for the majority of Baby Boomers. Rental properties have been very popular for the last 30 or 40 years and many two income families have invested in a rental property.
Owning Real Estate has two great advantages. One is the fact that your mortgage is being paid by your tenants, and if you purchase a property at the right price, the profits also go directly to you. The other powerful advantage of investing in Real Estate is the fact that as inflation increases, so does the price of housing. Every political levy, added license fee, inspection fee, material costs and wage increase directly affects the price of purchasing a new home and the market moves up to compensate for this costs. Real Estate is the only sure fire method to protect your nest egg from being ravaged by the costs of inflation.
As a home inspector I always hear people stating that they remember when they could have bought that house in that neighborhood for $100,000.00 dollars less than what it is selling for now. The sooner you start investing in Real Estate, the sooner you will start to see your investment grow.