The Role of Real Estate in Retirement Planning - Mortar Group

Dear Investor,

Many professionals and most high-income earners look forward to retirement with proper planning. But it can also be a time of financial uncertainty for some people. In a study conducted by AARP, more than half of retirees and pre-retirees in the United States are concerned about outliving their previously saved retirement funds. Of those, 47% fear losing their money in a market downturn.

Although these fears aren't unfounded, there are ways to combat them. Real estate investments can be a highly beneficial asset for retirees, especially during times of economic instability. However, these investments must be used wisely if you plan on relying on them for income.

Whether retirees decide to downsize and use the spare funds from their residence or invest in a rental property, there are plenty of ways to benefit financially.

By way of disclosure, we have an advertising relationship with Mortar Group, meaning we get paid for making this introduction and sharing this content. As always with these types of deals, consider this an introduction and not a recommendation. Every deal is unique and the responsibility to vet any and every deal you invest in still lies with you. You must be an accredited investors to invest.

Here are just a couple of benefits you may expect within real estate while planning for retirement:

Inflation Protection

Inflation can have a significant impact on retirement planning. As the cost of living increases, the spending power of money in savings and fixed-income investments goes down. This can translate to a decrease in their standard of living. In many cases, this makes it harder to cover essential expenses like healthcare and housing. Unlike fixed-income investments, real estate investments have the potential to appreciate over time, which can help offset the effects of inflation.

Income Generation

Rental properties can provide a stable stream of income that requires minimal effort, making it an attractive option for retirees looking to supplement their retirement savings.

This income can be resistant to economic instability, as rents tend to increase during times of inflation. Passive income from real estate investments can be further enhanced by selecting the right type of property and managing it well.

Tax Benefits and Deductions

As discussed by Business Insider, real estate investing can offer tax benefits including:

• Interest deductions: Taxpayers can deduct the interest paid on their mortgage and significantly reduce their tax bill. Investors can also deduct property taxes paid on their rental properties. Both of these benefits can help offset the cost of owning and maintaining the property.

• Depreciation deductions: The IRS allows investors to deduct a portion of the cost of their rental property each year as a depreciation expense.

• Repair and maintenance deductions: Investors can also deduct the cost of repairs and maintenance performed on their rental properties. If an investor needs to travel to their rental property for business purposes, they can deduct that cost as well.

What To Consider Before You Invest:

While investing in real estate can offer many benefits, it is not feasible for everyone. Before deciding if a property is right for you, there are several key factors you should consider.

Location

Location plays a big part in determining how much a property is worth. When evaluating a property for its potential earnings and desirable location, look for its proximity to schools, parks, shopping centers, and public transportation.

Your Own Budget

Before investing in real estate property, your finances should be addressed. Consider the down payment you'll need to cover the purchase of the property, and any minimum monthly mortgage payments. Also, don't forget to estimate maintenance costs and repairs. If you plan on turning this investment into a rental property, you can subtract this from the rental income you might bring in. Consider your other debts, expenses, and the overall condition of the market.

Your Long-Term Goals

The first step in evaluating a real estate investment is to define your long-term goals. Consider how much money you actually need to retire comfortably. Consider how much you're willing to sacrifice for these goals. Then, assess the potential returns of the investment and the level of risk. This includes considering the potential for market volatility, the potential for loss of capital, and other risks associated with the specific investment.

Making an Informed Decision

Investing and retirement planning can be complex, so ensure you're making an educated decision by working with a trusted sponsor. This process is essentially called sponsored investing when a team of investors compile funds to purchase real estate properties together. They're responsible for finding and managing the investment property, while investors receive a share of the rental income and potential profits from the property sale.

Sponsored investing can be especially beneficial for retirees. By working with a sponsor, retirees can leverage the sponsor's expertise and experience to make informed investment decisions. Additionally, sponsored investing can offer diversification benefits and potentially higher returns than other investment options.

When evaluating those you're considering for sponsors, look at the types of properties in their portfolio. You should also pay attention to the success they've had with investments. A sponsor's track record of meeting or exceeding performance targets is another good indicator of how much you'll be able to benefit from working with them.

Finally, consider any fees or expenses that might be associated with the investment. Reviewing the sponsor's legal and financial disclosures can also help you ensure that they are transparent and will comply with all regulations.

Last Call!

With only a few investment slots remaining to be committed, Mortar is in the final stage of their recent offering for Newtown Flats - a New York based, Cash-Flowing Value Add offering.

Newtown Flats is a multifamily Value-Add offering that is cash flowing at acquisition. Mortar is providing this opportunity to investors to take advantage of the current interest rate environment by targeting underpriced assets located in some of New York's best neighborhoods. Newtown Flats is projected to deliver a high 130.95% Cash on Cash Return at exit, with a quarterly distribution targeting over 7% in the first year. Mortar believes these opportunities represent some of the highest risk-adjusted returns in the current environment. View the Newtown Flats offering here.

Mortar believes in experience and smarter real estate investing. Their fully integrated in-house design, development, and asset management expertise has resulted in dozens of successful privately syndicated deals. This, combined with skin-in-the-game co-investments and in-depth local neighborhood knowledge, helps them mitigate risk and maximize investor returns. Focused opportunities combined with an intimate knowledge of New York's prime niche neighborhoods allows investors to diversify and deploy capital conservatively in projects and divest risk throughout the real estate lifecycle.

Mortar Group extends White Coat Investors access to exclusive opportunities on new offerings. If you would like to know more, please visit their website, or reach out to Investment Relations Manager – Francesca Gaccione at 646-559-9471, or gaccione@mortargroup.com.

Learn more about Mortar Group today!

Jim and Brett

James M. Dahle, MD, FACEP
Founder, The White Coat Investor

Brett Stevens, MB
COO, The White Coat Investor

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