The Landlord’s Guide to Retirement


Becoming a landlord can be a great way to help generate a steady positive cash flow for retirees. In order to live comfortably in their retirement years, many people find it beneficial to own rental properties as an additional source of income. However, before you start you need to be prepared to do a lot of hard work and have a decent amount of money available to start off with.


What Being a Landlord Can Do For You

The main benefit is of course the positive cash flow, and not to mention the freedom that comes with being your own boss. Studies have shown that a rental property in a good location can produce an additional $200 to $1,000 in monthly income after expenses. If you don’t have pensions coming in every month, this extra money is key to being able to maintain your lifestyle. If you are looking to make $1,000 per month on rental property income after all expenses have been paid then you need to be looking for an 8% cash on cash return. Owning rental properties can be highly beneficial and can provide you with the additional income that you need to survive in your retirement years. Many retirees choose to invest in stocks as their additional source of income for their retirement years, however, this can mean that your income levels will be directly correlated how well the stock market is doing. By becoming a landlord, you avoid such risks because your income will remain steady unless you choose to increase rent. In fact, about 6% of working Americans expect to have rental income in their retirement years.

What About the Taxes?

The IRS provides tax breaks to landlords that are not available to people who own personal residences. In fact, landlords are actually given the ability to claim all maintenance and operating expenses that are associated with the rental property. Probably the largest tax deduction available to landlords is interest, which includes interest payments on a mortgage that has been take out for the purpose of either buying or improving a rental property. Although certain major improvements are not immediately tax deductible, the long-term savings of these tax claims can be highly valuable for retirees. There’s more good news too: the rent money that you receive is not considered wages, so those who have taken early Social Security benefits will not be putting their benefits in jeopardy.

Investing in rental properties after retirement will provide you and your family with the ability to live comfortably throughout the rest of your life. The combined benefits of being your own boss, having an additional monthly positive cash flow, and the money you will save on taxes can make becoming a landlord quite appealing to many retirees.

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