Demand is what drives opportunity. The greater the demand, the greater the opportunity for growth. That holds true for nearly all aspects of business but is especially true for rental real estate. A recent survey conducted by The Motley Fool found that Maine is considered the best state to retire in, meaning investors may want to consider Maine as a worthwhile place to own rental real estate.
Maine is the best state overall for retirees
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According to the study, quality of life is the No. 1 most important factor for retirees. The definition or composition of the quality of life can vary depending on interests and ideals. Still, the fact of the matter is folks just want to be happy with their lifestyle. Maine takes the cake at No. 2 in the study for quality of life.
It ranked very high for good restaurants and retail stores in particular. Maine also boasts high-quality medical care at a reasonable cost. While it's not something most people like to think about, it is certainly an important factor, especially later in life. Add that Maine is the second-safest state with regard to crime, and retirees can rest easy.
The biggest downside to retiring in Maine is the weather. Being so far north means brutal winters, which can be a big issue for stiff joints, especially when shoveling the car out. Depending on the circumstances, that could be avoided by living a snowbird lifestyle with a second home. Retirees could also plan lengthy travel on around-the-world cruises, for example, or stay with family over the colder winter months, using the Maine property as home base the rest of the year.
How rental real estate can help you retire
Planning ahead and purchasing a rental property in a location you would like to retire can allow you to pay down the property while generating some extra passive income until you are ready to move in yourself. Ideally, the tenant's rental payment can help pay for the house until it comes time to move.
Or, if preferred, you can use the equity built in the rental property to upgrade to a larger, nicer, or more expensive property than you might otherwise have been able to afford. Additionally, investors have the option to own a rental property solely as an investment, using the rental income to help subsidize retirement income.
Is Maine a good place to buy for retirement?
Considering Maine has a lot to offer retirees in terms of comfort and enjoyability, there could be a steady demand for rental property, making it a strong long-term investment. But there is more to consider. While it's not the most expensive state for real estate, it isn't the cheapest either, which could make it difficult to find a rental property that actually produces a positive return.
In addition, the non-housing cost of living isn't super affordable, so if your personal retirement budget is tight, it may not be the best place to call home in your retirement years. Planning ahead, however, and using rental income to cover the mortgage, could allow you to pay down a significant portion of the property until you're ready to move in yourself.
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Purchasing a retirement property in Maine could set you up for an enjoyable and comfortable retirement. Using it as a rental property prior to moving in can help to offset the less desirable price points. You could potentially even market it as a vacation rental and use the high-dollar vacation rental income to accelerate the pay down.
An added perk with this approach would be getting to visit when it's not booked so that you can acquaint yourself with your eventual hometown. From cozy log cabins to lake cottages, Maine has the tranquility many seek in retirement, along with many other appealing factors, and can be a great candidate for purchasing a retirement property.
