How investing in real estate could help you retire early. Experts explain

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If you hope to retire early, you will need to make wise investments. Investing in real estate is an option you should seriously consider

Real estate investment is one of the few investment instruments that has existed since time immemorial. Having large tracts of land in ancient and modern times was associated with power and supremacy. At a time when there are a myriad of investment possibilities such as mutual funds, gold, bitcoin, ETFs, debt funds and so on, real estate remains a reliable investment option and tested.

Here’s how investing in real estate can give you a solid financial footing and help you retire early.

start early

When considering early retirement, you need to start planning for it early in your life. As soon as you start earning, you need to start investing. If you have just started a job, look for property investment opportunities nearby and invest as soon as you have a decent sum, said Asma Javed, vice president of a Delhi-NCR property company. At this point, the responsibilities are almost negligible, the family chores aren’t there, and you’re in the prime of life, she added.

When making a real estate investment early in your life, decide what type of property you want to invest in. If a long-term horizon and potential for appreciation are taken into account, investing in a plot of land would make more sense. Since the land does not depreciate, there will be no maintenance costs. This results in a lower charge and high appreciation potential. If you plan to retire in your 40s, the plot of land you bought young would be an asset when you retire.

Reduce your debts

When you have decided to retire early, you will have to make difficult financial decisions early in your life.

RPS Group partner Suren Goyal said instead of taking out a slew of credit cards and spending lavishly on taking out a slew of personal loans, it would be better to save money and invest in a property.

Investing in real estate does not always mean investing in land or an apartment. “With the introduction of innovative real estate instruments such as Real Estate Investment Trusts (REITs) and Fractional Investment Options, one can start with a small sum and grow as a Systematic Investment Plan (SIP)” , Goyal said.

Rental properties

The more rental properties you have, the better it will be for you to retire early. As your income increases, you need to invest in properties with high rental yields.

When choosing properties for rental income, having a good location is of paramount importance, said Anurag Goel, Director of Goel Ganga Developments.

“A huge investment in a remote and less likely to be developed locality will generate lower rental income than a well-connected locality. As you have decided to retire early, a series of rental properties will help you get a flow steady income after you retire. Research well and beware of emotional investment,” Goel said.

Improvise your investment

Despite a well-documented investment, sometimes a property does not turn out to be as lucrative or as lucrative as it once seemed. In such cases, be prepared to sell the property, sometimes at a discount, and reinvest elsewhere. Being prepared to improvise on your investment strategy will go a long way in planning your early retirement income.

Early retirement requires an early start and effective planning and execution. If executed well, you could very well enjoy your early retirement with property income.

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