Early Retirement with Real Estate

[Christine Walthall]

I'm looking for resources on calculating/planning for early retirement that add equity in real estate into the calculations. Our monthly cash flow from the real estate is not significant, but we have a great deal of equity in a few homes, and I haven't found a way to include these in any existing calculators. So far I only see retirement/brokerage accounts as a source of savings to input. 

Would you simply add your real estate equity into the retirement accounts section? It feels messy because the projected growth rate won't be the same. I imagine that we would slowly sell off the properties and use the profits to supplement our monthly income until we hit typical  retirement age (when our 401ks and social security would kick in).

Would appreciate any resources or advice on this!

[Kevin Sobilo]

@Christine Walthall, Or do cash-out refinances to fund your retirement because when you sell you pay taxes! Or 1031 exchange into more properties that give greater cash-flow.

If you have owned these properties a long while you have depreciated them on your taxes and they have appreciated in value meaning you will end up paying capital gains on MOST of the sale price when you sell. However, if you keep them until you die your heirs inherit them (under current laws) at a stepped up basis (the value at that time) and do not have to pay tax on that gain.