Build your own pension with Turnkey Rentals

[Hank Keller]

Since 1998, there has been a 44% drop in Fortune 500 companies offering pensions; instead pushing their employees to manage their retirement themselves through a 401K or other management investment vehicle [Source: Towers Waters]

I was in that situation. I had a corporate job and was contributing to an IRA to ensure that I had something to live off of but also saw significant losses during the crash a few years back. I also had local rentals but couldn't manage more and keep my full time job so decided to start investigating turnkey rentals. As part of a bus tour weekend a few years back, my turnkey provider taught that investors can fund their own pension. Check out this scenario:

You buy 5 homes with an average cost of $60k

The rent is rolled over to buy another each time you hit $60K

Assume a 3% appreciation

What would you have in 15 years…? 30 years?

Initial Value - $300,000

Initial Investment – 5 Houses

Net Monthly Rent = $2,500

After 15 Years

- Value: $1,900,000

- Number of Houses: 23

- Net Monthly Rent = $11,000

After 30 Years:

- Value: $15,000,000

- Number of House: 97

- Net Monthly Rent = $44,000

I am in year 4 of this exact journey. My wife and I now have 8 homes using our Turnkey provider and average $4k/month in income replenishing a self directed IRA to fund additional rentals all completely hands off. Turnkey rental investors don't have to deal with toilets or tenants and while there is no turnkey company that can guarantee 100% occupancy and no maintenance issues, I've been getting steady high rates and will continue to go back for more. In some instances you won't make as high of a return as you would if you manage the properties yourself but when your situation doesn't permit taking on more, consider using a turnkey company to increase your portfolio.

So if you start this plan today, would you be in a different tax bracket after 5 years? 10? How about 15 or 30 years? Does building your own pension and not relying on the stock market sound like something that would interest you? How are you protecting your future?