Using Investment Property to Satisfy Your Retirement Income Needs

Investment property can be a great method for satisfying your retirement income needs. Many individuals have achieved that income goal with rental property, and with the right plan, so can you. But first, you'll have to estimate how much income will be needed in your retirement years. After that, you'll have to develop an investment plan to produce that income. And, you'll need to do all of this without using a crystal ball!

Estimating Future Living Expenses

To get an estimate of how much income you'll need to meet your future living expenses during retirement, inflation will have to be accounted for. This is done by converting the "present costs" of your living expenses into "future costs" for those same expenses during your retirement years.

To determine your future living expenses, a special math multiplier is used (called the inflation multiplier) that converts present costs into future costs. The size of the multiplier depends on the average annual rate of inflation that is estimated and also on the number of years that exist between the present and the future (when your future costs are estimated in retirement).

Developing an Investment Property Plan

To generate the estimated income for your retirement as described above, a plan for investing in rental property will have to be made and carried out. The plan takes into account your personal and financial resources and constructs an investment plan that uses a conservative form of acquiring larger (or more) rental properties over time.

This rental property investment process is called "pyramiding". It is a step-by-step process that gradually builds the size of your rental property portfolio over time. Many fortunes in investment real estate have been built by using this relatively simple concept.

For more in-depth information about how to develop a personal plan for meeting your retirement income needs with rental property, please visit The Landlord's Library book collection. It's the ultimate, one-stop source for practical, comprehensive information on the entire subject of residential landlording.

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