[Dream2retire]

I want input and advice about investing in rental property in TV.

Long long story short: I have a cash pension plan from a previous employer. Pays out as an annuity payment at retirement until my death then 50% to my wife until she passes. No value after that. Let’s say it’s $2K/month. Now they are offering us to cash out or roll it over.
I really don’t want any advice about rolling it over.
I was investigating rental property investment. If I could buy a house and get $2k /month rental income after expenses I would be thrilled. My thinking is over the years this would increase ( 20, 15 , 20 years). My income would grow and I would still have the principal ( the house) and that would be growing as well.

After looking at it a little, I’m thinking long term rentals wouldn’t bring in that much after expenses. It appears like it may even be difficult to get long term renters. Short term would definitely bring in that and more during winter months but I’m guessing very little at all during the summer.
Do you agree or disagree? Observations?
Obviously there are a lot of details I have left off to try to be brief. Just wanted your input and experiences. Thanks

[retiredguy123]

A rough rule of thumb is that a good rental property should rent for one percent of the property value per month. So, a $300K house should rent for $3,000 per month, which is very unlikely in The Villages. The way to make money on rental property is to buy cheap houses and to manage them yourself. If you plan to buy a new house and hire a management company, I doubt that you will make money.

[Dream2retire]

Thanks for your input. I appreciate it.

I had invested my mother’s money in condos in Myrtle beach 5 years ago. It worked better than I had planned the first 2 years then COVID hit. After 4 months I had to dump the properties ( minor loss on the sale) because w no income only expenses I would have lost money for her. A year later they doubled in value. Arg!!! The same properties are 60% higher than they were so now it’s no longer a good investment.

The management company was taking 40% BUT the income/ investment cost ratio was still really good.

I’m hoping to find something that gets me income AND grows in value.

[justjim]

OP, you ask some good questions. I have purchased and “flipped” several houses over the years (didn’t get rich but did make some money) but only rented a couple of them. I did put a pencil to renting property in The Villages. No question there is money to be made from several rentals but it also can quickly turn into a full time job. I decided not to trade the good job I previously had (for 38 years) for another one. We are comfortable. Retirement brings two questions. 1. How much time do you have left and 2. What do you want to do with the unknown time you have left. After some thought and discussion we decided on some travel, more time golfing, church and club activities, neighborhood and friends, and remaining flexible to new ideas, activities, etc., etc. But to each their own.

[Dream2retire]

Originally Posted by justjim

OP, you ask some good questions. I have purchased and “flipped” several houses over the years (didn’t get rich but did make some money) but only rented a couple of them. I did put a pencil to renting property in The Villages. No question there is money to be made from several rentals but it also can quickly turn into a full time job. I decided not to trade the good job I previously had (for 38 years) for another one. We are comfortable. Retirement brings two questions. 1. How much time do you have left and 2. What do you want to do with the unknown time you have left. After some thought and discussion we decided on some travel, more time golfing, church and club activities, neighborhood and friends, and remaining flexible to new ideas, activities, etc., etc. But to each their own.

Thank you. Appreciate it. I’m grasping at straws.

My life didn’t go as planned financially. My wife and I have worked hard since our teenage years and made plenty of money. Neither of us had support or guidance from family and made some bad decisions( marriages) along the way. Our fault, no one else’s. Her ex left without any support for kids and I paid dearly to support mine. We both lost our savings and were plunged into a financial hole. As a result it took years to dig out of the financial hole from 5 kids and a government that takes more money each year than our entire net worth. We have been making great progress more recently. My wife has enough retirement income for herself. I’m not at that point yet and just seem to be burnt out. I’m looking at retirement numbers EVERY day. I’m trying to motivate myself to keep going but for some reason I feel like I’m done and the finish line really isn’t that far away. I’m sure I’ll drag myself across the finish line and make it to retirement.

lol maybe I should be laying on a couch and paying hourly to vent my frustrations. ������

[justjim]

There is one thing you can’t do. You can’t unring the bell. That said, there are many opportunities and options available to retirees who are drawing only social security.

You don’t need as much money as you might think to retire. I know some couples who live in The Villages and they draw their social security, work part-time jobs - (20-25 hours a week). There are many part time jobs here in The Villages. Working a part time job still gives you a lot of time to enjoy the many activities available here.

In addition, there are other retirement communities just outside The Villages where you can rent or purchase a comfortable house less than you can in The Villages. These communities have a lot of amenities and clubs you can get involved in.

[Randall55]

Originally Posted by justjim

There is one thing you can’t do. You can’t unring the bell. That said, there are many opportunities and options available to retirees who are drawing only social security.

You don’t need as much money as you might think to retire. I know some couples who live in The Villages and they draw their social security, work part-time jobs - (20-25 hours a week). There are many part time jobs here in The Villages. Working a part time job still gives you a lot of time to enjoy the many activities available here.

In addition, there are other retirement communities just outside The Villages where you can rent or purchase a comfortable house less than you can in The Villages. These communities have a lot of amenities and clubs you can get involved in.

We sold our home in the Villages for a sizeable profit. We are now renting until we find a new location to build. Our social security checks cover the rent and utilities. We have not dug into our personal money for much. The money is sitting and collecting good interest. The home is not ours and we do not have to pay for upkeep and maintenance.

When you buy an investment home, you will need to make a down payment and pay for closing costs. Rentals in the Villages are furnished with golf carts. This will be more money out of your pocket. Property taxes will be higher because you cannot homestead. You will have to pay management fees, upkeep, and maintenance.

Here is my point: Look at ALL options: renting, buying, or purchasing for investment. Do a cost analysis for each. Your answer for an easier retirement will become obvious. Good Luck!

[Dream2retire]

Originally Posted by justjim

There is one thing you can’t do. You can’t unring the bell. That said, there are many opportunities and options available to retirees who are drawing only social security.

You don’t need as much money as you might think to retire. I know some couples who live in The Villages and they draw their social security, work part-time jobs - (20-25 hours a week). There are many part time jobs here in The Villages. Working a part time job still gives you a lot of time to enjoy the many activities available here.

In addition, there are other retirement communities just outside The Villages where you can rent or purchase a comfortable house less than you can in The Villages. These communities have a lot of amenities and clubs you can get involved in.

Appreciate your input.

[Dream2retire]

Originally Posted by Randall55

We sold our home in the Villages for a sizeable profit. We are now renting until we find a new location to build. Our social security checks cover the rent and utilities. We have not dug into our personal money for much. The money is sitting and collecting good interest. The home is not ours and we do not have to pay for upkeep and maintenance.

When you buy an investment home, you will need to make a down payment and pay for closing costs. Rentals in the Villages are furnished with golf carts. This will be more money out of your pocket. Property taxes will be higher because you cannot homestead. You will have to pay management fees, upkeep, and maintenance.

Here is my point: Look at ALL options: renting, buying, or purchasing for investment. Do a cost analysis for each. Your answer for an easier retirement will become obvious. Good Luck!

Thank you for your points.

[shut the front door]

Originally Posted by Randall55

We sold our home in the Villages for a sizeable profit. We are now renting until we find a new location to build. Our social security checks cover the rent and utilities. We have not dug into our personal money for much. The money is sitting and collecting good interest. The home is not ours and we do not have to pay for upkeep and maintenance.

When you buy an investment home, you will need to make a down payment and pay for closing costs. Rentals in the Villages are furnished with golf carts. This will be more money out of your pocket. Property taxes will be higher because you cannot homestead. You will have to pay management fees, upkeep, and maintenance.

Here is my point: Look at ALL options: renting, buying, or purchasing for investment. Do a cost analysis for each. Your answer for an easier retirement will become obvious. Good Luck!

The buyer does not pay closing costs. The seller does.

[MrChip72]

I'm a landlord in the Villages. Many long term rentals are charging between $2000-$2500/month right now. Typical expenses on a home is around $1200/month not including maintenance type things. Then you have to account for times where you might have some empty months between tenants at times. The profit for many is razor thin or non-existent in some years.

This is all assuming that you do it yourself and not use a management company. If you would be using a management company, there's no chance you would make a profit at this.

There's many much better ways to invest your money with less risk and less headaches.

[CarlR33]

Originally Posted by Dream2retire

Thank you. Appreciate it. I’m grasping at straws.

My life didn’t go as planned financially. My wife and I have worked hard since our teenage years and made plenty of money. Neither of us had support or guidance from family and made some bad decisions( marriages) along the way. Our fault, no one else’s. Her ex left without any support for kids and I paid dearly to support mine. We both lost our savings and were plunged into a financial hole. As a result it took years to dig out of the financial hole from 5 kids and a government that takes more money each year than our entire net worth. We have been making great progress more recently. My wife has enough retirement income for herself. I’m not at that point yet and just seem to be burnt out. I’m looking at retirement numbers EVERY day. I’m trying to motivate myself to keep going but for some reason I feel like I’m done and the finish line really isn’t that far away. I’m sure I’ll drag myself across the finish line and make it to retirement.

lol maybe I should be laying on a couch and paying hourly to vent my frustrations. ������

It sounds like you do not have a financial person-advisor to talk to about this? As others have said try to enjoy your retirement when you do get there while you can. As my advisor says, you will be able to enjoy a more active retirement at age 60 than when your 80.

[HandyGrandpap]

Hello OP,
Regarding your retiremet plan, do some research ahead of taking the cash. Still accruing $$ with your service? What is the interest rate you will be receiving, Age of you and spouse, etc. Don't want answers to the questions, some thoughts for consideration. Companies often prefer the buy out as it is cheaper for them as oppossed to the long term financial liability.

Regarding Real Estate, another idea to consider is long term rentals in your local area. If your looking at single family and can get it priced right requiring some sweat equity long term rentals at the sweet price point for your area can build equity and cash flow and if your area is lower priced you can purchase multiple. As the end result is ROI, food for thought my friend!

[Randall55]

Originally Posted by shut the front door

The buyer does not pay closing costs. The seller does.

If you get a bank loan there will be fees .

[Two Bills]

Take professional advice re pension options.
I have always found that if someone wants to buy you out of anything, it is because it is to their benefit, not yours.
Why gamble when so near finishing line.
You gamble when you have the means to make up the losses.