Do you have a plan for retirement that includes leveraging an additional stream of income? Too often, when people retire or become empty nesters, they are left trapped in their homes on a fixed income with limited resources.Â
And in America, we often sell the American Dream of home ownership. But when does home ownership become a nightmare for some of us? Maybe it’s when we’re in a home that no longer fits our current needs. Or we want to age in place, and we feel like we’ve either outgrown where we’re at or we’re unable to stay in the home that we are currently in.Â
My guest today, Carol Glover, developed a love of real estate from a young age, which she carried through to being a real estate broker, then later a real estate attorney over the last 30 years. Carol grew up with parents who, after WWII, had a light bulb moment that started them on a lifetime of buying, investing, and fixing properties, and adjusting their portfolio to build for retirement. At that time, this was not the everyday experience. Carol’s parents were innovative with their investments—the original house flippers.
Carol brings to light a common situation for those who are retired, empty nesters or who find themselves in a place where they feel stuck in their homes. On one hand they’re proud to own their own home. At the same time, they feel trapped in their home as it no longer serves their needs in their older age and empty nester stage in life.
What we learn from Carol is that you can move equity from being trapped in your house to an income producing asset, so that as you age, you can have an additional stream of income. Part of what is going to sustain you when you gear down and have a different lifestyle is your estate. In this video, learn how to build equity, invest in rental properties, and create residual income to build wealth for your retirement and beyond.Â
Watch the interview and keep reading below to learn my greatest takeaways on how to leverage your home’s equity and make deals happen.
How to build equity to invest in retirement
2:30—Carol’s parents were innovators in the real estate space before you could find any array of HGTV shows on house flipping. They were the original house flippers, using this strategy to build equity; move on to the next property; and invest, invest, invest in retirement.
When is the right time to sell pay capital gains
7:01—The lifestyle is high in California, and people don’t want to gear down when they retire. They’d rather keep the lifestyle they’ve become accustomed to or better. Now if you sell and pay capital gains, you have the difference between a $500K basis appreciation; you sell for 2.2 MM and can exclude $500K if you’re married. Then you can take the cash and travel or rent a condo near your children. Plus selling frees up inventory for people to buy that home, and keeps the market active.
What you need to know about The 1031 Exchange Program
8:15—The 1031 Exchange Program is used in commercial property and for the growth of the commercial market and growth of businesses, long established that you can sell your commercial property and instead of paying capital gains when you sell, you can reinvest it and defer it to the next asset—a new investment property, which becomes a new income producing asset as you continue to age.
How to choose the right real estate agent
13:10—There is a sense of pride in home ownership. But for those looking to buy their first home versus renting, I ask Carol what she recommends. Appreciation. Ninety percent of people start their research online, which is great—but many people also choose a real estate advisor this way, from online ads. Carol says it’s important to interview two to three people before choosing a real estate agent to work with because real estate is hyper local, and it matters that the real estate agent you choose knows the area, knows the business of financing and is transparent regarding commissions.
I‘m curious, do you have a plan for retirement that includes leveraging an additional stream of income?
Stay inspired,
Keri
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