How To Fund Your Retirement with Rental Property Investment

by Madison McCracken  3/07/2022


Rental property investments can be a lucrative and successful business venture for anyone to explore. Using rental properties to fund your retirement has proven to work great for some people when done correctly. That said, real estate investments take time, effort, and enough capital to get started. So, if you’re wondering how you can fund your retirement with investment properties, check out this blog. 

What Makes Rental Properties Successful?

Investing in rental properties can be an extremely profitable avenue for people willing to put forth the time, effort, and money. But, what exactly makes it a successful career path? Here are a few of the main factors that make real estate investing worthwhile. 

  • Steady Income
  • Tax Benefits
  • Appreciation

Steady Income

Owning and operating a rental business is one way to make a steady profit. That said, when you own a rental business, you are in charge of setting the rental rates for each property. However, to profit from your properties, you must have tenants steadily occupying them. As such, when all of your properties have tenants, you receive income from each of them every month. 

Tax Benefits

Top Tax Write-Offs for Real Estate Investors to Consider During Tax Time

As most people know, purchasing a rental property is a substantial immediate expense. However, the tax benefits that come along with the purchase frequently make it worth the investment. When you operate a rental business, you can deduct some expenses, including:

  • Mortgage Interest
  • Home Maintenance
  • Property Taxes
  • And More


The value of real estate grows over time. If you didn’t know, appreciation is defined as the increasing value of a property over time. These increases lead to more equity and can raise the dollar amount attached to your home. That said, many factors affect home real estate appreciation, like the current housing market, property location, and interest rate trends. 

Can You Fund Your Retirement With Investment Properties? 

The typical working person stays dedicated to saving up and budgeting for their retirement fund. Now, if you don’t have established savings or an expendable income, this can be a stressful thought to consider. So, can you fund your retirement with investment properties if you don’t have savings? 

Yes, it’s possible to use your rental business to save for your retirement fund! However, keep in mind that it’s not for everyone. Investing in real estate takes knowledge of the rental market, capital to start with, and patience through the lengthy process. 

Continue reading as we discuss some points to consider before using rental properties to fund your retirement. 

Will Rental Investments Work For Your Retirement Plan?

As you can imagine, using rental investments to fund your retirement is not suitable for everyone. Before you decide to explore this avenue, consider many things first. Here are a few questions and concerts to think about before you dive into the world of investing in real estate: 

  • Do You Have the Capital to Start?
  • When Do You Plan on Retiring?
  • Can You Cover Repairs, Taxes, and Fees?
  • Do You Have What It Takes to Be a Landlord?

Do You Have the Capital to Start?

To fund your retirement with investment properties, you need to have the right amount of capital to start. Banks typically look for a 25% down payment for investment properties. Similarly, they expect to see a consistent income history and well-established savings. 

Sadly, the typical middle-class worker does not have the right amount of cash readily available to buy rental properties to fund their retirement. With that, if you don’t have decent savings and reliable income, it’s not wise to go above your means to purchase real estate. 

So, before you consider investing in rental properties to fund your retirement, think about your current finances and reach out to a financial advisor for more information. 

When Do You Plan on Retiring?

Typically, it takes a few years to see significant income from rental properties. Also, depending on the location of your property, your return on investment will vary according to the current rental market trends. 

That said, if you invest in a location that allows for competitive rental rates, you can set higher rates and see greater returns. On the other hand, if you invest in rentals located in lower-income areas, you likely won’t see a significant profit for a few years. 

As such, if you are looking to retire within the next 5-10 years, now is the time to start investing in rental properties and saving money. However, if you’re looking to retire sooner within the next couple of years, you may want to look into other savings methods. 

Can You Cover Repairs, Taxes, and Fees?

How You Can Fund Your Retirement with Investment Properties

If you’ve never purchased a rental property, you may think that the original purchase is the only significant expense you need to worry about. However, that’s not true. Some properties need extensive repairs or renovations over time. Additionally, it’s important to consider any possible damages from tenants’ normal wear and tear. 

Fixing up rental properties is a significant expense, especially if you own more than one. So, if you’re interested in being a landlord, it’s crucial to think about these large expenses before you start the investment journey. 

Additionally, all property owners must pay taxes, which is another expense that can creep up on you if you don’t account for it beforehand. Expenses and fees pop up all the time when you own rental properties. Some of the most common fees to think about are HOA fees, property management fees, and insurance. 

So, if you don’t have significant savings to cover property taxes, repairs, and other fees, you may want to reconsider your investment. 

Do You Have What It Takes to Be a Landlord? 

You become a landlord as soon as you find tenants to occupy your rental property. That said, being a landlord is a ton of work. Unfortunately, if you don’t allocate some of the necessary chores, it can become a full-time job, which is not exactly the goal after retiring. 

When you own a rental, you need to think about tenant screening, maintenance, repairs, monthly rent collection, lease construction, and more. 

However, when you hire a trusted property management team, you don’t have to worry about the daily tasks of owning a rental. But, on the other hand, you will have another monthly fee. Luckily, a reputable property manager in Northern Virginia, or in your local area, can take care of your rental’s daily tasks at a reasonable monthly rate. 

Challenges When You Fund Your Retirement With Investment Properties

Although investing in rental properties can be a great way to fund your retirement, there are also some challenges. Here are some of the common drawbacks that come along with rental investments. 

  • Income Can Vary Each Month
  • It Takes Capital to Start
  • Investing Takes Time, Work, and Patience

Income Can Vary Each Month

How You Can Fund Your Retirement with Investment Properties

To earn income with your rental properties, you must have tenants occupying them at all times. If you can’t find tenants to live in your rentals, or you’re experiencing high turnover rates, then you’re missing out on monthly profits. 

Most landlords know that income isn’t necessarily guaranteed with a rental property, so it’s important to save and account for vacancies and low-income months. 

It Takes Capital to Start

As stated above, to generate a decent income from your rentals, you need to have the right amount of capital, to begin with. If you don’t have the necessary funds to start your rental business, you likely won’t see significant profits in the long run. 

Investing Takes Time, Work, and Patience

Landlords are typically very busy people. After all, to create a profitable investment, your rental property needs to be up to date. Additionally, it must be compliant with laws and building codes, and desirable for potential tenants. So, that means landlords may need to complete renovations, purchase new appliances, and market properties correctly. 

Struggling to Manage Your Rental Properties?

Top Tax Write-Offs for Real Estate Investors to Consider During Tax Time

After you look at the factors of investing, you can start to consider how to fund your retirement with investment properties. That said, many landlords who own one or more rental properties want to simplify their business with a trusted rental management company. 

Professional Property Management of Northern Virginia can handle all the day-to-day tasks of your rental property. We can take care of tenant relations, maintenance requests, home inspections, eviction services, and more. Our dedicated team of professionals is ready to help your rental business succeed. 

So, if you need a trusted property manager in Northern Virginia, contact Professional Property Management today to learn more about our comprehensive leasing services!

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