4 Ways To Invest in Real Estate in Your 50s and 60s

Reaching older adulthood often brings a shift in financial priorities, with a greater focus on income stability and long-term security. Real estate can play a meaningful role in that strategy. 

However, the level of involvement you choose should reflect how much time you want to invest, your risk tolerance, and your retirement goals. If you’re in your fifties or sixties, consider whether any of these four ways to invest in real estate can work for you.

Low-Involvement: REITs

Real Estate Investment Trusts (REITs) offer one of the most hands-off ways to gain exposure to property markets. These publicly traded investments allow individuals to earn income from real estate without directly owning or managing properties. 

For those seeking diversification and liquidity, REITs can fit well into a broader retirement portfolio.

They are especially appealing to investors who prefer predictable income streams and minimal day-to-day responsibility. Dividends from REITs can supplement retirement income, though they may fluctuate with market conditions.

Moderate-Involvement: Turnkey Rentals

Turnkey rental properties are fully renovated homes that are ready to rent immediately. Typically managed by a property management company, they allow investors to earn rental income without handling tenant issues or maintenance directly.

While less demanding than active property management, turnkey rentals still require oversight and financial planning. Investors should evaluate location, tenant quality, and management fees carefully. For many, this approach balances steady income with manageable involvement.

Active-Involvement: Value-Add Rentals

Value-add rentals involve purchasing properties that need improvements and increasing their value through renovations or better management. This approach requires more time and decision-making but can lead to higher returns over time. It suits investors who are comfortable being more hands-on.

Common strategies include:

• Renovating outdated units.
• Improving property management.
• Increasing rental rates strategically.

This level of involvement allows for greater control over performance but also introduces more risk. For those willing to stay engaged, it can be a rewarding path within real estate investing in your fifties and sixties.

High-Involvement: Fix-and-Flip

Fix-and-flip investing is the most hands-on strategy, involving buying, renovating, and quickly selling properties for profit. It requires strong market knowledge, reliable contractors, and careful budgeting. While potentially lucrative, it also carries higher financial and execution risk.

Before taking on a project, it’s important to understand financing options and timelines. Before flipping a property, compare hard money and bank loans to determine which financing structure aligns with your goals and risk tolerance.

Real estate offers multiple entry points for investors, each with different levels of effort and complexity. From passive REITs to active renovation projects, the right choice depends on your personal goals and capacity for involvement. 

To decide which approach fits your situation, speak with a financial planner before making any real estate investment decisions.

Innovative Ways To Invest in Real Estate

Real estate investment is a proven path to building wealth. However, the traditional route of purchasing rental properties or flipping houses isn’t the only way to dive into this lucrative market. 

Modern investors are finding innovative ways to invest in real estate to generate income, including leveraging properties they already own. 

This approach can transform a personal asset into a source of steady income.

Short-Term Rentals

In the era of Airbnb and VRBO, short-term rentals have become a popular avenue for property owners to generate income. If you have an unused room, guest house, or vacation home, renting it out on these platforms can provide a significant income boost.

Before diving in, consider zoning regulations and taxes associated with short-term rentals in your area. Also, keep in mind that successful short-term rentals often offer unique experiences or amenities that set them apart from traditional hotel accommodations.

Backyard or Vacation Property Yurts

For those seeking a more unconventional route, consider investing in a yurt as an auxiliary dwelling unit for your backyard or an addition to your vacation property. 

These round, tent-like structures are relatively affordable to install and can serve as unique guest accommodations, attracting a niche market of travelers seeking a “glamping” or off-grid experience.

Yurts can also serve multiple purposes, doubling as a home office, yoga studio, or artist’s retreat when not rented out, adding value to your property beyond the potential rental income.

House Hacking

Selling your home and purchasing a duplex or four-unit apartment building can be an effective strategy for downsizing and simultaneously generating income. You can live in one unit and rent out the rest. 

This approach, often referred to as “house hacking,” allows you to leverage the rental income from the other units to offset or even cover your mortgage payments, effectively reducing or eliminating your housing costs.

Besides providing a steady stream of income, it also offers potential tax benefits, as you may be able to deduct expenses related to the rental units. But be sure to check with your tax advisor first! Furthermore, you’re still investing in real estate, which can appreciate over time, adding to your wealth. 

It’s a savvy method for those looking to simplify their lifestyle, decrease housing costs, and invest in their financial future all at once.

These are a few innovative ways to invest in real estate that may not require the same level of capital investment or financing as building a portfolio of rental properties. 

Whether you’re leveraging existing assets or exploring new investment avenues, there are you can build wealth in real estate to supplement your retirement savings.