Real Estate Investing Expert: How To Turn Housing From an Expense Into Income in Retirement
Written by
Jaime Catmull
Edited by
Gabrielle Olya
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Many Americans are worried about being able to cover all of their retirement expenses. A recent GOBankingRates survey found that one-third of Americans fear not saving enough money and/or outliving their savings in retirement.
“In order to make retirement funds stretch further, it’s important to eliminate the biggest expense in your budget: housing,” said David Greene, host of BiggerPockets’ “The Real Estate Podcast.”
Greene suggests several ways to do this.
Purchase a Home With an Accessory Dwelling Unit
If you will be buying a home in retirement, look for a property that includes an accessory dwelling unit.
“Buying a home with an accessory dwelling unit (ADU) that can be rented out for additional income can provide more money in a passive manner,” Greene said.
Pay Off Your Mortgage Before You Retire
Eliminating housing costs before you retire will free up a big portion of your retirement budget.
“Putting together a plan to pay off the mortgage before retirement age is a good idea,” Greene said.
If You Move, Hold Onto Your Previous Property
You may want to relocate in retirement to downsize, be closer to family, live in a place that affords you a better lifestyle or simply because you want a change. Whatever the case may be, Greene recommends keeping your current home rather than selling it.
“Keep each house you buy and turn it into a rental property instead of selling it to buy the next one,” he said. “This way you can have several paid-off homes in retirement, each generating additional income — not just one.”
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Gabrielle Olya contributed to the reporting for this article.
Survey methodology: GOBankingRates surveyed 1,045 Americans ages 18 and older from across the U.S. between May 1 and May 4, 2023, asking seven different questions: (1) Please state your level of agreement with the statement: A mortgage is the best financial solution when buying a home.; (2) Have you ever personally owned an electric car?; (3) How likely are you to buy an electric car in the next five years?; (4) When was the last time you were in the market for a new car?; (5) Knowing it will save you money on gas, how much more would you be willing to spend on an EV over a similar gas-powered car?; (6) What area is your biggest concern during retirement planning?; and (7) What financial steps have you taken for retirement? (Select all that apply.). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.
