Were you thinking about retirement when you were a twenty-something? Did you invest in a 401(k) in your thirties? No matter what the answer, having passive income involved is a must. Building an effective retirement model that includes passive income will let you enjoy life and spend less time counting every penny.

Passive income from property management is very beneficial and fits within retirement strategies

The average desired retirement age in the US is before 65. Hurry up and take these steps before you get retirement greeting cards, so you're confident that the best years are yet to come.

Relying on Social Security benefits might work if you have official employment and pay the minimum of your monthly income into Social Security. But benefits are managed by the government and depend upon your earnings. The current generation of retirees may be the last group that get anything from Social Security, so take full advantage of it.

IRA accounts are also great tools to save and invest money that is tax deferred. The question then becomes how much should you save and will it be sufficient for you to live stress-free and enjoy your retirement years to the fullest? Keep in mind that Medicare benefits won't cover all healthcare expenses, to say nothing of unexpected circumstances. You'll definitely need to establish reliable sources of passive income. It would be great if your children could take care of you and provide financial assistance, but that scenario isn't one you should count on.

So apart from receiving social benefits or time traveling to tell "past you" to save more, there are two options worth considering. The first one deals with being a stock market guru and beating index funds, which most hedge funds can't even do anymore. Or second, become a real estate investor. Passive income in real estate may not guarantee you a trip to Bali or expensive purchases like a brand new Maserati, but it can bring great benefits, such as growing in value over time, outpacing CPI, and being in an industry you can easily understand.

Passive income found in real estate - and more specifically, rentals - allows for flexibility in that I can live in it or rent it out. I can borrow against the property, or just let it sit and grow tax deferred (and even in some cases be tax free - primary tax exemption). If it's a duplex, you could even rent it and get a reverse mortgage at the same time. Real estate passive income and becoming a landlord is something you can do now that will still be there to grow and support you during retirement.

Let's take two main strategies:

  1. You're almost in your golden years, and it's time to think of what will make you happy and secure as a retiree. Consider renting out your current home. It's more convenient to downsize to a smaller place while receiving monthly rent payments from your larger home. Whether you rent or buy a rental for yourself, a separate cozy apartment has numerous benefits. First of all, you won't need to worry about mortgage payments, yard maintenance, or home repairs and improvements. Secondly, this approach is a great solution for grandparents who want to live near their grandchildren and visit them more often. All you need to do is find an affordable rental in the neighborhood and enjoy your family time.
  2. The second strategy is to sell your current home and move into a duplex. The benefit here is that downsizing to something easier to manage and smaller is a big cost savings, and having two units lets you live in one and rent to paying tenants in the other. Preferably you wouldn't want a mortgage, but if it's unavoidable, then having the second unit can pay the mortgage, insurance, and taxes - giving you a place to live rent free. In addition, after two years you can look to sell, with a large piece of the sale price being tax free. This is a passive income strategy that keeps a roof over your head and allows your investment to appreciate while you get older.

Don't worry if you've never had to manage rental properties or interact with tenants. With the help of a property management software like TenantCloud, the landlording business will be your second favorite activity - right after enjoying your dream retirement. But don't jump into things too quickly. Before you start, boost your property management knowledge and even get professional advice from investment advisors. Passive income from real estate can be very beneficial and fit within many existing or new retirement strategies.

What are your retirement goals? Are they connected with property management? Share your thoughts in the comments section below. :)

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