We adhere to strict standards of editorial integrity to help you make decisions with confidence. Some or all links contained within this article are paid links.
Buying a dream retirement home is a fantasy for many people, but the big question is — can it become a reality?
Not all older Americans have enough savings to buy a home outright in retirement, and even those who do might prefer not to lock their money into an illiquid asset. Fortunately, retirees have options beyond traditional mortgages.
For personalized strategies, hiring a financial advisor can help retirees explore tailored solutions for securing their financial future.
Alternatively, crowdfunding platforms offer opportunities to invest in real estate without large upfront costs, while private equity ventures provide access to diversified investments. If you’re living in Florida in your mid-60s and are hoping to invest in property, here’s what you need to know.
Should you buy a house as a retiree?
While you absolutely can take out a mortgage as a retiree, think carefully about whether you should.
In fact, it may be worth consulting with a financial advisor to make this big decision, and for investing strategy – yet, finding one you can trust can be an endeavor in itself.
With Advisor.com, you can find the right financial professional to help you navigate big financial decisions. Their free matching service can help you find the right financial advisor who can help tailor a strategy so you can meet your personal goals.
The process is simple: Answer a few quick questions about you and your financial situation. When you’re matched with an advisor, you can set up a free, no-obligation consultation.
No discrimination on the basis of age
For retirees hoping to get a mortgage, there’s some good news. The Equal Credit Opportunity Act prevents lenders from discriminating based on age, so being 67 won’t affect your chances of getting a loan.
However, your debt-to-income (DTI) ratio and stable income are key factors. Most lenders prefer a DTI below 36%, though some may allow up to 43%. Additionally, your credit score and down payment matter. Also be ready to provide sufficient proof of your income – whether that’s from a combination of Social Security benefits, pension income, and investment income.
While some lenders accept as little as 3% down, aiming for 20% is recommended. This could help to keep your housing costs affordable, open up access to a broader choice of lenders and reduce the risk of ending up with negative equity in case you need to sell if something happens — such as your health taking a turn.
How you can invest in real estate and retirement all at once
Balancing real estate investments with retirement planning can be a smart way to build both wealth and security for the future.
So, if you want to get in on real estate value appreciation and passive income, there are several ways you can do so with minimal hassle and flexible entry points while avoiding a pricey mortgage.
Commercial real estate
Commercial real estate is an example of a reliable income stream for your retirement plans.
First National Realty Partners (FNRP) allows accredited individual investors to access grocery-anchored commercial real estate investments on properties with higher rents, longer lease terms, and professional tenants – for a minimum investment of $50,000.
FNRP has developed relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods.
You can even invest through a Roth IRA — meaning, you could receive tax-free payments and distributions that won’t be added to your combined income calculation.
Crowdfunding
If you’ve ever wanted to invest in real estate without the headaches of owning physical property, platforms like Arrived make it easier than ever. Backed by world-class investors like Jeff Bezos, Arrived allows investors to buy stakes in rental homes and vacation rentals without having to worry about property maintenance or tenant management.
You can pick from a curated selection of homes and invest in your own share. While Arrived doesn’t offer a Roth IRA, it accepts investments from a checkbook IRA. You’ll also avoid any tax on rental income you earn, or appreciation on the investment.
Best of all, you can start investing in rental properties with just $100.
You can also invest in loans taken out to finance renovation and construction projects through the Arrived Private Credit Fund. The loans are secured by the underlying residential properties, making them relatively less riskier.
Arrived Private Credit Fund has historically delivered an 8.1% annualized dividend yield, making it ideal for you if you want to potentially set up a monthly income stream without taking on any more work.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
