Real estate for retirement?

Many people find their superannuation pensions and personal savings are nowhere near enough to live out the kind of retirement they envision. This helps explain why so many Kiwis rely on investments to pad out their retirement funds and hopefully secure a comfortable post-work life.

The question is: Which investment is right for me? Plenty of people have found the answer to be residential investment property.

Unlike many other types of investments, property is something your average person can understand. After all, we already live in houses, and many Kiwis approaching retirement already own their own home.

When compared to more complex investment options, it's easy to see how real estate can stand out from the pack.

Gains tailored to your goals 

One aspect of investing in residential property that appeals to many people pre- and post-retirement is how you can turn a profit in multiple ways.

For instance, say you're looking to buy and sell in the hopes of bringing in a large lump sum.

Buying investment property in Hamilton in an area that has shown steady capital growth, holding on to it until the peak of the next property cycle has been reached and then selling it for a tidy profit can be a great strategy.

Or perhaps you're in the market for regular cash flow, as opposed to a one-and-done deal.

Purchasing Auckland investment property that you can rent out to tenants in an area with high rental yields will leave you with a source of regular income you can depend on each month, sort of like a paycheque even after you've left the office behind for good.

At the same time, it's important to remember that real estate should be viewed as a part of your overall financial planning agenda, not the entirety of it. As with any other type of asset, investing in real estate comes with inherent risks.

Your first course of action should be working with a professional financial planner who can help you explore you options, real estate or otherwise.