Now that the Baby Boomers are largely reaching the age of retirement, they are packing their bags and moving to states that offer not only a nice life-style, but that are also cheaper to live in. The great state Texas certainly fits the bill. But what if you’ve found that your retirement savings isn’t quite enough to keep you living in the financial style you’ve become accustomed to over the many decades you worked for a living.
One way older folks who’ve lived in Texas for most or even their entire lives are cashing in on their retirement is to apply for a reverse mortgage. If you’re 62 or older, have owned your family home for decades and have been paying the monthly mortgage payments religiously, you can apply for a reverse mortgage that can earn you tens if not hundreds of thousands of dollars.
If approved, you can take the proceeds in one lump sum payment or you can take equal monthly disbursements. The best part is you don’t need to pay the loan back unless you move or you die. To find out about applying for a reverse mortgage in Texas you can check out the ten best lenders the great state has to offer by clicking here.
But what are some other ways retirees are earning passive income to supplement their retirement income not only in Texas but all over the country? According to a new report by Yahoo Finance, if you are seeking a form of passive income you should take a serious look at real estate investment trusts or REITS.
REITS are considered better than owning actual rental property since you don’t have to deal with the hassle of late-night maintenance calls or management responsibilities like collecting rent from tenants who seem to never have enough money.
REITs allow you to own a portion of some of the most prized real estate in the U.S. Since REITs collect their rents on a monthly basis, they will pay you monthly too. A pure passive income.
Diversified Portfolios of High-End Real Estate for Earning Passive Income
Says the Motley Fool, it’s possible to diversify your holdings by purchasing REITS in different sectors such as retail, office, multi-family, industrial, storage, and healthcare properties. Now that interest rates are on the rise, the market has reduced REIT appraisals.
But if you are looking at a multi-year investment time horizon, now is a good time to buy low when it comes to adding REITS to your retirement portfolio. Fact is, if you were to put $30,000 to work in three separate REITs now, you can earn up to $125 in monthly passive income. That’s a $1500 raise per year.
Here’s how the investment process works.
An Industrial REIT that Produces Good Passive Income
Dream Industrial REIT (TSX:DIR.UN) is said to yield around 6 percent at present. By investing $10,000 you purchase 854 units at a low $11.40 per unit. This will yield you about $50 in monthly passive income.
Since the stock is down over 30 percent in 2022’s dismal financial year, the stock is now low enough to be an attractive buy. It’s a bargain compared to its true market value. Dream manages and owns multi-tenanted distribution and warehousing properties in Europe, the U.S. and Canada.
With a joint venture said to be in the works, higher growth is expected for Dream Industrial in 2023 making this an optimum buy at present.
Looking for a Cheap Retail REIT?
One more attractive REIT is said to be First Capital REIT (TSX:FCR.UN). Presently valued at $16.80 it earns around 5.16 percent in yield. If you make a $10,000 investment in First Capital stock, you can purchase around 595 units which will earn you about $43 in monthly passive income.
First Capital is said to operate a portfolio of retail properties all across North America. They are considered solidly anchored by recession-proof tenants such as hardware, groceries, and other necessities for day to day living. One important factor to keep in mind is that it sits on some substantial underutilized land which if developed properly could become very valuable.
The First Capital REIT is said to have been an underperformer for a number of years now which means it trades at a 30 percent discount which is considered significant.
More recently, a well-known investor has been toying with the stock in attempt to unlock some of its underutilized value. This includes a possible sale of its valuable land. The entire sale process could take considerable time however.
Meanwhile, Texas and other U.S. based investors can sit back and collect passive income on a monthly basis.