Retirement Planning with Real Estate
Hi BP!
I've been heavily investing in RE for 2+ years and I often try to extrapolate the future based on my basic experience. The latest of those extrapolations is to calculate how much net rental income is needed to safely retire. By safely retire I mean <1% chance to have to do anything besides manage your property manager.
Many guidelines exist for retiring with a portfolio of stocks and bonds, from safe withdrawal rates based on simulations, to specific bonds/stocks mixes at every age. Sadly, limited information exists for folks heavy in RE investments.
Is it safe to retire when your net rental income = expenses (seems very risky to me) or when it is 2x, 4x (seems like a reasonable bet), or 10x your expenses?
How many years of data do you even need to determine the net rental income of a portfolio to base your calculations on?
It seems to be a function of type of neighborhood (A,B,C or D), CapEx schedule, macro trends, and other things I do not yet know!
I asked a financial planner about this and while she did not deny the importance of real estate in retirement planning, she could not give any useful data or recommendations.
How are others planning to retire using RE?