Real Estate Investing Strategy

How to Replace Pension or Social Security with Rental Income

Many people wonder what real estate investing strategy should I use? Most people know some simple facts:

• investment rental property is a great source of wealth for a majority of the rich and is the best investment




• Many people have failed to invest enough for retirement



• Government overspending has jeopardized the chance of receiving an old age Social Security or retirement pension



• Stock market investing can be risky - stocks can go to zero value



• Many companies have not funded their pension plans properly and could be at risk for defaulting on their pension obligations



• Public pension funds promised by local governments are totally unsustainable

Many people are looking at investment rental property as a way to supplement or replace retirement pensions or social security. However, some people are concerned about investing in rental property because of the real estate bubble that burst in 2008. You should understand that the real estate crash hurt only those speculative investors that were buying and flipping real estate using the greater fool theory of investors. Real estate investors that invest for positive cash flow were virtually unaffected by the real estate crash.

There are four important characteristics of a good property investment strategy are:

• Your investment property should be aimed at residential real estate




• The properties should be able to generate a positive cash flow when rented



• The rental property should be located in neighborhoods that are safe



• The rent should be aimed at lower-middle to middle class incomes

A good real estate investment strategy is to buy a single family home or duplex every 2 to 3 years. After the tenants have paid off the mortgage, each property should be able to generate $1000 to $1500 per month in free cash flow. This means that you only need to buy and hold 2 to 3 rental houses to equal the maximum benefit from US Social Security promises. For the casual real estate investor, I recommend buying and holding no more then 3 to 5 rental houses.

Unless you are intent on using real estate investing to get rich , this real estate investing strategy should be enough to adequately fund a comfortable retirement should the government or your company fail to fulfill their obligations.

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