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Long-term investments can provide you with excellent rewards. But many people often miss the advantages of long-term investing, especially the boon it brings in retirement. A study by the National Institute on Retirement Security shows that approximately 45 percent of working families in the United States do not have retirement accounts. 

Moreover, combining both those who have a retirement account and those who do not have one in the working household category, their median retirement account balance is only $3,000. Another dismal reality is that the median retirement savings of working households reaching retirement is $12,000. 

If you are looking for a good investment before retirement, consider real estate. Real estate assets can survive inflation and offer portfolio security. In contrast to cash investments, many investors favor real estate investments more. Read this article about real estate investments if you want to have a better living during your retirement days. 

Real Estate Assets to Make Before Retirement

Here are the real estate assets to put your money in to help you retire rich. 

Commercial Rental Properties

Investing in commercial real estate is easier if you have experience investing in other real estate assets and financial reserves. Commercial real estate may include warehouses, skyscrapers, office buildings, strip malls, storage units, and car washes. 

For instance, you can build an office building and lease the units to business owners to diversify your investments. One thing to consider in your venture into commercial buildings is that you must meet safety and management requirements. 

Your goal in commercial real estate investing is to generate a stable cash flow and avoid a decrease in rent. In this case, it is a better strategy to offer multiple-year leases to your tenants. 

Residential Rental Properties

For a start in real estate investing, you can put your money in residential rental properties, such as single-family homes and duplexes. Multifamily buildings with 5 to 30 units are also an excellent investment if you want to produce significant returns.

Buy Class A properties if you want to venture into residential real estate investment. You can guarantee that Class A properties are newly constructed, draw high-income tenants, and demand a higher rent. 

Real Estate Mutual Funds

You can go passive investing through real estate mutual funds, real estate investment trusts (REITs), and real estate exchange-traded funds. This investment strategy is beneficial for investors who have limited capital and time. Be sure to assess the long-term rewards provided by such investments and their previous performances. 

Diversify the assets when investing in passive real estate. For example, invest in mortgage REITs, office REITs, residential REITs, and healthcare REITs. 

Mortgage Notes

Another option when you only have limited time as a real estate investor is to put your money into performing mortgage notes. This type of investment does not require you to manage properties directly, but it still offers a stable cash flow similar to residential real estate investments. 

Banks, brokers, and loan sales platforms offer mortgage notes to investors. Be sure to assess the risk profile, borrower profile, and assets supporting the note when you buy a mortgage note. Discover whether the assets backing the note possess resale value before purchasing it. Check the FICO score and debt-to-income ratio of the borrowers in the borrower profile. 

Tax Liens and Tax Deeds

You can also invest in tax liens and tax deeds if your goal is real estate passive income. A city or local county puts a lien on a property when the owner does not pay property taxes. When a property has a tax lien or tax deed placed on it, it means the owner cannot sell or refinance the property until the lien is discharged. 

Every year, unpaid property taxes amount to over $14 billion, and a third of these unpaid property taxes are sold to private investors. But, if you are considering investing in tax liens and deeds, be sure to assess the property and its potential financial risks. 

Retirement Plans That Allow Real Estate Investing

401k Retirement Plans. Ask whether your employer allows you to invest your 401k plan in real estate. If yes, you can buy real estate assets using this retirement plan. 

  • Self-Directed IRAs. You can start real estate investing by opening a self-directed IRA. Open an account with a qualified trustee and choose real estate assets for your investment. 

  • Self-Directed Solo 401k. There are self-directed solo 401k plan providers that allow you to buy real estate using your retirement money. You can purchase commercial and residential real estate, tax liens/deeds, and mortgage notes using this retirement plan. 

Endnote

The real estate assets mentioned in this article are the best investments before you retire. These investment options can give you a stable income during your retirement days. When purchasing a real estate asset, be sure to assess its potential risks and investment returns. You can use retirement funds to buy a real estate investment.