{"id":10682,"date":"2023-01-10T13:53:52","date_gmt":"2023-01-10T13:53:52","guid":{"rendered":"https:\/\/chettioan.com\/?p=10682"},"modified":"2023-01-26T06:54:23","modified_gmt":"2023-01-26T06:54:23","slug":"is-real-estate-worthwhile-as-a-private-retirement","status":"publish","type":"post","link":"https:\/\/chettioan.com\/is-real-estate-worthwhile-as-a-private-retirement-10682.html","title":{"rendered":"Is real estate worthwhile as a private retirement provision??"},"content":{"rendered":"

\"Is<\/span><\/p>\n

Currently, one hears again and again about old-age poverty and low pensions. Due to the uncertainty of the situation in retirement age, young people in particular need to make provisions in good time. Will the payments into the pension fund be sufficient? Or should you just take the money to the bank?<\/p>\n

In addition to a variety of possible hedges, it is also very popular to purchase a property in order to be able to live rent-free in the already paid-off house later on. But is it really so simple?<\/p>\n

There can be no universal answer to this question, because many criteria have to be considered. It depends above all also on the personal financial situation. To help you make the right decision for yourself, we present below the points you need to think about and try to answer the question for you whether a property is worthwhile as a retirement provision.<\/p>\n

What to consider – The advantages<\/h2>\n

The advantages of a real estate as a retirement provision are manifold. Concrete gold is still regarded as a safe financial investment. Financial crises, economic downturns and high inflation regularly cause people to invest their money in concrete gold in order to "keep it safe. The returns from a "rent-free life" within one's own four walls are tempting and if one manages to buy a solid property that makes investments calculable and the returns predictable and if one's own life is solid enough that one can foresee over the years how one's own trajectories will run, then real estate is a good "pillar" for private security for old age and retirement. But there are some things to consider…<\/p>\n

1. The timing<\/h3>\n

If you would like to build or buy a real estate as age precaution yourselves, then begin in time with it. You can usually get good terms on a loan from your bank. The older you get, the more difficult it becomes to finance your own home, as retirement and the time of loan repayment become closer and closer together, and the banks calculate corresponding risk premiums. It is also favorable if you can use a building savings contract. On average, you can then pay off the necessary loan in 20 to 30 years and then live rent-free in your own home.<\/p>\n

Real estate as a retirement provision is particularly exciting if you have worked out your own life plan properly. That is, if one knows "here I want to live with my family for the next decades". Selling a property shortly after the purchase, because the private life planning has changed, is usually a big loss business for the real estate owner.<\/p>\n

2. The situation<\/h3>\n

When building or buying, make sure you choose a good residential location. This is important for value retention. It could happen that you want to or have to sell the house again (if you change professionally or privately). Or if you want to rent out the house in the meantime, initially for a limited period, before using it yourself when you retire.<\/p>\n

By renting out you can initially generate income again. But you will only find tenants if the location of the house is attractive. They can build naturally also the house only for the purpose of the letting and live even in a more favorable renting dwelling. In this way you can also supplement your pension and still use the rented property as a private retirement provision.<\/p>\n

The location is particularly important in old age. In old age, mobility decreases, so you should already think when buying that it makes sense to have doctors, supermarkets and recreational facilities within walking distance to be able to live carefree in old age in the property.<\/p>\n

Of course you pay a good location but always expensive. Accordingly one must weigh with the real estate purchase exactly between costs and use and should lose here already a thought at the time in the age.<\/p>\n

3. Property as retirement provision for landlords<\/h3>\n

\"Tax<\/span><\/p>\n

As a landlord you have tax advantages, because you can deduct your expenses (i.e. the acquisition costs, but also the loan or renovation costs). In addition, you can pass on some of the running costs that you incur with the rental property to your tenants. This includes regular modernization and renovation, such as painting the facade or a new heating system.<\/p>\n

This circumstance should be considered with the financing. Maybe it makes sense to buy a property and finance it by renting it out? In old age, the property is then paid off and can be used by the owner.<\/p>\n

4. Real estate for private retirement provision for owner-occupiers<\/h3>\n

If you prefer to move into your own home, you have more freedom than in a rented apartment. You can change anything you want at any time at will. Besides neither rent increases nor notices threaten. Instead of paying rent and financing the property at the same time, you only have to bear the loan installments, which can be calculated well over long periods of time.<\/p>\n

Important: Regardless of whether you want to use the property yourself or rent it out: You should discuss your plans with experts. Use brokers or financing advisers of your house bank and bring up your project to the discussion. Here some tips will surely fall off fast and you can judge, which project fits perfectly to your life. Many experts offer their services free of charge, because you want to accompany your real estate purchase naturally subordinate (and so earn), however also a paid discussion with an expert (ask times with the local consumer center for a consulting date) can be very worthwhile and trailblazing!<\/p>\n

Which costs are to be considered – The disadvantages<\/h2>\n

Whether you move into the property yourself or prefer to rent it out is always a personal decision. However, in both cases it is important that you also take into account all possible cost traps.<\/p>\n

Above all, the calculation and the financing must be very well thought out.<\/p>\n

This is what you have to pay attention to when buying real estate for private retirement provision:<\/p>\n