Welcome to Retirement Worth Having

From 1991 to 2021 we've been on an average pace of 4% per year appreciation in real estate on a national level. Let's talk about that.

Thinking differently about retirement

Mission Statement

Retirement Worth Having is a valuable source in how we think about and prepare for retirement both philosophically and financially.  High level discussions on creating our vision of retirement and then crafting the financial support to make it happen take place here.  Thank you for joining the discussion.

Who Will You Be in Retirement?

What does retirement look like to you?  It seems we as Americans have plenty of big dreams and few detailed plans.  Here are some questions to ask yourself;

  • What age am I targeting for retirement? (Hint: Doesn't have to be 62, 67 or 70. It can be "after our last graduates from college." Or, something of the kind.)
  • Do I choose to fully retire or have a side gig to keep me busy?
  • Where will I/we live?
  • One house, or two?
  • What debts, if any, will we choose to maintain? (ie, mortgage, car payment, etc.)
  • What income is sufficient for the lifestyle at which I/we choose to live?

The questions can go on an on. Yet, how will getting started with these six questions shape the rest of your life?

In what ways would you benefit if you, and if applicable your loved one, sat down this next Sunday afternoon, opened a bottle of wine and really discussed these six questions in detail?

I encourage you to schedule yourself into a Thinking Session sometime in the next 10 days.  Schedule it now before you get busy and forget.

Who do you know that would benefit by putting a little thought into their retirement?  

Please forward this email to them today.

Real Estate As An Investment Vehicle

(Be sure to "Show Blocked Content" in order to see pics/graphs.)

As an investment property REALTOR and property management business owner you know that I love real estate as an investment vehicle. The graph above shows why.  Pay attention to the dips and gains in conjunction with the yellow line which represents 4% per year appreciation.  This is a national statistic.  (See below for Olathe, KS, a suburb of Kansas City.)  A couple of take-aways include;

  • Given enough time, 4% as an average clearly works.
  • If you don't have to sell a rental property it's difficult to lose money.
  • We see that when real estate sits over 4% appreciation for an extended period of time a correction follows.
  • Last year's (and this year's) growth of >10% is, most likely, unsustainable.

So, is 4% appreciation on average a good number?  Well, that depends. Remember, this is a national average.  So I thought I'd look at a property I held from 2004 to 2021 in Olathe, KS.  I bought the single family home at $164,000 with 4 bedrooms, 2.5 baths and a 2 car garage.  Classic suburbia.  You know, good schools, plenty of shopping and soccer games every Saturday morning with the kids.  

In January of 2021 I sold the property for $260,000.  Note two things;

  1. This is right about a 3.6% average appreciation rate, m/l.
  2. This inclues the rise, fall and reemergence of real estate before, during and after the Great Recession.

I've always found that in any ten year period of Kansas City's real estate I come back to roughly 3.5% per year appreciation.  Time and time again.  So this all fits.  And the same appears to be true on a national scale at 4.%.  Sure, if you live in Phoenix or Miami, the swings have been far greater.  Seek local counsel for your details. I can refer you to someone in your local market, if it helps.

Now again, is 3.5% or 4.0% good?  Well, what is inflation?

I went to https://www.officialdata.org/ and simply plugged in a couple values and discovered two things;

  1. The average inflation rate between 2004 and 2021 was 2.2%/year.
  2. This particular house outpaced inflation by $22,000 m/l.

Now, since there are Four Benefits of Real Estate Investing, and we've only discussed one, I think this isn't too shabby.  Could you have established more growth being in the stock market or some other vehicle?  Almost definitely, unless you begin to calculate the other three benefits of real estate investing... and I haven't even discussed the advantage of leveraging your capital when it comes to real estate investing.  

We'll discuss the Four Benefits in our next edition and return to leverage sometime in the future.

Questions? Comments?  I'd love to hear from you.

To learn more about Chris, visit the Author page.