Want To Retire Early Using Real Estate Investing And Rentals? This Is How You Can
An average household income in the US in 2019 was roughly $62,000 annually (before taxes). After deducting all the taxes (roughly 15,000 per 1 household), the net income on hand is $47,000. 1-person medium yearly income in the US in 2019 is roughly $36,000 (before taxes).
As it becomes obvious from the given numbers, if you will be more or less passively earning anything like this (or a sum, which would satisfy you in reality, not in dreams), you can retire early. That’s, surely, if you’re one of a cohort of those people who dream of retirement not in the 70s but when you’re full of physical strengths in your body and have a clear mind.
We’re not exploring something unrealistic here, like winning a lottery (which is slim to none) or being rewarded with an inheritance from some remote uncle you’ve never heard of, who left you a fortune worth millions. We’re talking about retiring early with real estate.
Investing for early retirement
Potentially, to retire early, you could do some clever real estate investing in your 20s. In 10 or 20 years of indispensable financial discipline, you are perfectly able to retire in your thirties, forties, or sooner. We pick to retire early with real estate because it is a simple option available to everyone financially literate and responsible enough to run the rental premises. And exactly thanks to its simplicity, so many people today resort to it. Even Warren Buffet tells to investors that the best practice in any investment is to rely on something understandable and simple.
Also, as many of us live in this or that real estate, the thought of investing in real estate for retirement may come across many minds simply intuitively. The same, intuition will tell most of us, what property they’d like to invest in and what qualities an object must have (objects creating bigger comfort of life can bring bigger money).
So, what are the steps you should take:
- Plan the necessary goal: how much money do you actually need for retirement (or, rather, what cash flow you need to create annually to cover your living expenses)
- How much money you can really save each year to approach your goal. You must understand that you have to accumulate at least 20% of the cost of the property to finance it with a bank loan (+ around 5% of its cost required to close the deal and around 5%-10%-20%+ more for renovation to make a place really alluring for future dwellers unless they already live there). Usually, you have to work hard for a certain number of years and save maximally of what you can to reach this goal.
- Evade expensive and unnecessary purchases. You can only accumulate the required sum for the purchase swiftly if you will not make any purchases not required to keep your life going. So, if any purchase doesn’t concern your life and health, don’t do it, save money.
- Pick a nice real estate, do a thorough background check, and do the best of your math in calculating profits and expenses. The market is flooded with software tools that can calculate profit and various indices based on the sums you enter so you don’t break your brains in the process. Also, there are reliable sources of information about some real estate costs and profitability – like the ‘Property Finder’ database of mashvisor.com website, which not only tells the cost and location of commercial objects but also what estimated value they have and what cash on cash income they generate from being rented on various websites like Airbnb.
- Thus, starting to ponder about real estate investing in your 20s, by your 30s, you can feasibly accumulate the entire cost of some object or its biggest part. With clever financing further on, you can start with several objects at once or with discreet time spaces between the purchases – thanks to bank financing, splitting your money into several portions of initial installments. This approach would be the cleverest to embrace the biggest share of your income within a short time. In several years of real estate management as a landlord and a small portion of luck, you can establish sustainable flows of cash to retire before your 40s. There are people sticking with this approach who run dozens of real estate objects in their 50s, cleverly leveraging their money and bank financing.
Benefits of investing in real estate for retirement
- You can jump out of the grid of 9-to-5/5/2.
- That’s the most realistic chance of becoming financially independent.
- You can create a hefty pension for yourself and leave a fat slice to your children and grandchildren.
- Retire early from a job you hate. Especially if you hate working on any job.
- You will be freer in planning your time and can travel most of your life while leaving a local manager to work for you (even one of your children).
But remember that investing for early retirement is suitable for you if you’re meticulous and rigid about your financial plan for life and start it early, cherry-picking really good objects of real estate to work with.
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More about DGY
DGY is a real estate investment and property management company. Our experts have an impressive experience in turning businessmen into smart real estate investors. We collect limitless opportunities throughout the world’s best real estate markets and help our clients implement the best deals. We take care of all due diligence and customize documentation while your income grows. We also provide you with property management services so you can forget about the tiresome maintenance of several objects and entrust this process to professionals.
Investment advice and recommendations
DGY is an investment company that takes care of every client and helps them become successful investors. With the help of an investment experience and a well-thought plan, we will help you examine the market, choose a strategy specifically for you or your business, and calculate future costs to start making money with real estate investment.
In order to invest in real estate, you should consider how you will run your management in Ukraine. DGY will help you eliminate all possible pitfalls at an early stage as a personal project manager will be assigned to your case. They will assist you in choosing the project according to all required objectives.
DGY Investments takes care not only of purchasing property but also renovating an existing one. With the help of a thorough plan and estimating, we will thoroughly prepare a property for sale. Our professionals evaluate an investment property and create a strategy that includes the costs for renovation, possible taxes, fluctuations on the market, etc. Therefore, our clients are able to resell the renovated properties in Ukraine with more than 15-20% profit from the initial price.
Before our clients decide to deal with real estate investing, they consult with our experts concerning details such as the necessary documents needed to purchase a property and successfully run all the processes connected to it.
Therefore, if you are eager to invest in Ukraine, it’s essential to have all the paperwork done correctly, and that’s the moment when our team of experts takes care of this step. DGY Investments helps investors buy real estate property, manage the paperwork, start preparing relevant documents for purchasing realty in Ukraine, and close the deal successfully.
Real estate investment opportunities in Ukraine
When an investor decides to invest in real estate in Ukraine, the most affordable way to attain stable passive income is through buying residential real estate. Investors can expect to receive a regular monthly payment from their tenants at a fixed monthly amount, unaffected by inflation or other unforeseen circumstances. The amount of rental income will vary depending on the size, type of property and location. For example, buying an apartment in Ukraine’s capital Kyiv is beneficial to investors due to offering a large working population, central location and affordable prices. Hence, the minimum price of renting a decent one-bedroom apartment in Shevchenkivskyi District will be around $1000 per month in 2021, followed by Pecherskyi District with a cost of $850 per month. Besides, investing in real estate in Ukraine annually brings clever investors up to 15% of yield, attracting many business people every year.
Properties for investments in Ukraine
Ukraine has a giant sector for real estate investing. Businessmen who come there all over the world often choose between investing in residential and commercial properties. The main advantage of buying property in Ukraine is the affordability of prices on the houses and apartments. For instance, if you invest in real estate in a historical district, a luxurious apartment will cost you around $85k only.
How to invest in Ukrainian Real Estate
In order to invest in Ukrainian real estate, you should take into account a list of crucial factors. The first one is to choose what kind of realty you are going to invest in: residential or commercial. It is vital as it should comply with Ukrainian real estate law. The second tip is to identify the purpose of purchase in order to make a strategy for the property. For instance, you may purchase the property for your own use or buy it for lease. The next step is to calculate the taxes and what kinds of taxes are payable during the purchase, owning, or selling. Also, to invest in real estate properly, you should keep in mind currency control rules in Ukraine to sell a property and get a higher profit.