‘It feels like I’m holding two full-time jobs:’ I’m 65, retired and have a $2,000 pension. I own rental properties, but they’re stressful to maintain. Should I keep them or sell?

Dear MarketWatch,

I’m a 65-year-old married man in Southern California. I retired about 5 years ago, and have very little in pension payments of about $2,000 from my old job, without any medical benefits.

But I have rental income from about a dozen single-family homes that I collected during my professional career as a civil engineer.

Some of these homes have mortgages, and others are free and clear. I currently manage and maintain all of them myself. Even though I’m retired, it feels like I’m holding two full-time jobs, that of a handyman and a bookkeeper. 

‘Even though I’m retired, it feels like I’m holding two full-time jobs, that of a handyman and a bookkeeper. ‘

I’m still able to do them for now, but looking ahead to five to 10 years, I’m not sure if I’ll still be able to. 

So my question is, what are my options with these homes? Should I sell? Should I consolidate the single-family homes? And how can I make it such that they can give me good income to help me in my retirement, and free up my time, so that I can really enjoy my retirement? 

Retired With Two Full-Time Jobs

The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.

Dear Retired,

While lucrative, managing a dozen properties while retired doesn’t quite seem like the retirement people usually envision.

It’s hard to keep track of tenants, track rent payments, keep up maintenance, insurance and mortgage costs, and so many other things.  So why not hire a property manager or someone who is experienced at doing this sort of thing for a living? 

I know they’ll charge you a fee, but for all this hassle, it may be worth it. Do the math and see if it makes sense for you to get someone to help. If you’re able to offload the day-to-day tasks, you can focus on enjoying your retirement. 

Justin Giles, who has been investing in real estate for nearly two decades, told me that you may be able to get a “good deal” with that many properties in your portfolio. 

“If the properties are cash flow positive, he can live on that income plus his pension to delay Social Security for the next five years,” he said. 

If they’re not, then he suggested that you take out a rental portfolio loan to help you get some cash. (But do your own research before you decide to go that route, and consider the downsides.)

As to whether you should consolidate: If you’re able to run these operations efficiently, perhaps even more so with that future property manager, then why rock the boat? Plus, you might incur more expenses by doing that.

Let’s say you want to consolidate by swapping out a couple of these single-family homes for an apartment building. It may be easier to run that operation, but “swapping out might be difficult in [Southern California] because prices are so far above rents in most areas,” Giles said, “that rent yields are low.”

Since you’re trying to optimize this portfolio to give you good income during your retirement, you may be better off sticking with the houses you’ve got already. 

So I’d say look for help: Find someone who can take over your two full-time gigs for a good rate. Enjoy that well-earned retirement. 

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