Sometimes, surveys show how many Americans have money they’re saving for retirement. Very few have the amount they’ll likely need. That means they might never retire. If they do, they may live very frugally because they’ll barely have enough for rent, food, and other essentials.
This means that some older Americans must move in with their kids or grandkids. Monetary concerns for older people continue. Some adults approaching retirement age can’t help but think about ways they might make some extra cash they can use when they eventually stop working.
Real estate investing presents one possible money-making avenue for not just older adults but younger ones as well. It’s not as farfetched as you might imagine, and we’ll discuss it in detail right now.
How Many Adults Have Retirement Savings?
First, let’s talk about how many Americans have the money they’ll need in retirement. You’d think that most adults have at least some, even if they haven’t saved a lot.
47% of men between 55-66 have no retirement savings. On top of that, only 17% of adults in the US say that they prioritize retirement savings over more pressing financial concerns.
This reveals that many Americans don’t think about retirement savings because they have more immediate monetary worries, like paying their monthly rent, utility bills, food bills, etc. Some don’t even think they can ever retire. Like becoming homeowners, they don’t feel they’ll ever reach that point.
House Flipping
Real estate usually makes a good investment. Most people know this, even if they know very little about it. They may feel they can never own property, though, or make any money off of it.
If you get to the point where you’ve got a little extra money, you can invest it in many ways. You might put it in the stock market, or you can put it into something more stable, like a CD or an IRA. You won’t lose any money if you do those things, but you also have limited growth potential.
Putting money into real estate instead can maximize your profit margin. You should only do it if you’re not too risk-averse, though.
House flipping becomes a viable option if you live in a city or community that has a lot of so-called zombie houses. These homes sit vacant for a long time. Usually, banks own them. You might consider buying them at auction when they go up for sale.
HUD Properties
If you buy a house at auction, you can often get it for much less than you might think. Zombie homes that sit abandoned for years usually deteriorate somewhat, but often, they’re more or less structurally sound. Banks eventually decide they’ll sell them rather than keep paying property taxes.
You can sometimes buy these homes in the $10K-$20K range. If you get a windfall through something like an income tax return, a bonus at work, or through an inheritance, you can often purchase one of these zombie homes. It might need some work, but it’s not in such bad condition.
You can also look at HUD properties. HUD stands for housing and urban development. These properties often stand empty as well. They usually need more work, or they’re in areas that have fallen on hard times.
You can put a bid in on a HUD property at any time. You can usually bid less than the suggested HUD price. This entity often accepts offers if they’re even close to the asking price. They’re hoping you’ll purchase the home and fix it up.
Make the House a DIY Project
If you buy a zombie house at auction or purchase a HUD property, you can do various things with it. You might live in it yourself if you do some work on it first. That way, you can build equity, which you can’t do if you keep renting apartments your whole life.
However, you can also hold onto the property while you improve it. You might do some of the work yourself if you like DIY projects and have some aptitude for them. You probably can’t do the plumbing and electrical work, but you can paint and do other minor repairs.
When you’ve got the house in better condition, you can either flip it, meaning you’ll put it on the market and charge more than what you paid for it, or else you can rent it out and act as landlord. Either way, you can use this real estate investment and make money you’ll put away toward your eventual retirement.
You Can Keep Repeating this Process
You might go through this process several times. You can learn new abilities each time you buy a distressed or vacant home and work on it. You’ll get better with your DIY skills. In time, you might own several homes that you’ve renovated.
You can keep those homes and charge rent. You can collect that money, and it’s passive income. You must pay the property taxes on the houses, but you can usually more than offset that with the rent money you’ll bring in.
You may also flip the houses that you fix up if you feel that makes more sense for you. That way, you can still make money, but you won’t have the headaches that sometimes come up when you’re acting as landlord.
You might hold onto the homes you fix up, rent them out, and collect money from them that way for several years. When you get to retirement age, you can sell them if you don’t want to deal with them anymore.
Usually, real estate becomes more valuable the longer you sit on it. If you rent out your renovated properties now and eventually sell them at a markup, you’re using both business models at once.
Not everyone should do this. You must have a strong stomach since real estate can lose value as well. However, there’s no denying you can potentially make retirement money this way.
