What percentage of your retirement portfolio is in real estate?

[sassnco]

Until now I have always invested in stocks and bonds for my retirement portfolio. I am now considering diversifying to also invest in passive real estate (besides our home, which has been paid off). We plan to retire in 4-5 years, so I will be doing this investment pre-retirement.
My question is what percentage of your retirement portfolio do you have in real estate? Thanks for your thoughts!

 

[steelyman]

I have 10% of my retirement portfolio in REIT funds, all in a tax-deferred IRA.

 

[Iggysmom]

I have some rental properties, and the equity in them is about 30% of my net worth. Who knows if this is better or worse than the next investment, but it does make me feel like I have a bit of control and predictability that I might not otherwise have.

 

[misanman]

14.5% in REITs.

 

[pb4uski]

I'll say 0%. I do have some preferred stock issued by REITs but those are more bond-like and have only indirect risk with respect to real estate operations.

 

[Dtail]

Zero.

 

[Scuba]

We have one rental property, but it is our former home. We did not buy it as an investment property but decided to relocate and want to preserve the opportunity to live in it again down the road if we choose. So far the return hasn’t been great and our income is too high to get any tax benefit, so financially we would be better off in the stock market for sure.

We also have about 20% of our portfolio in hard money loans. The return hasn’t been nearly as good as the market, but we view it as a diversification tool. The return is way higher than bonds so we have most of the rest of our portfolio in equities. These loans are held in my IRA, and could be a good source of cash flow if we wanted or had to take IRA distributions. However the return is variable over time (when a loan pays off the cash may sit idle for a month or more before reinvestment) so I wouldn’t want to count on it as a required part of our cash flow.

Generally real estate has not performed as well as the stock market over time. Unless you really crave being a landlord, or you like the idea of hard money loans, a diversified REIT can give you exposure to the category without the headaches.

 

[Chris7]

Near 10% in REITs.

cd :O)

 

[Montecfo]

1-2 percent reits.

 

[Sojourner]

Not counting the value of my primary home (which comprises about 7% of my total net worth), only about 1-2% in REITs.

 

[l8_apex]

80%

 

[pb4uski]

Not counting the value of my primary home (which comprises about 7% of my total net worth), only about 1-2% in REITs.

Since the OP asked about the percentage of real estate in our retirement portfolio, I didn't include either of our homes since I don't consider them part of our retirement portfolio... just places where we live. If I had an income producing property then I would include it as part of the retirement portfolio. IOW, for us the retirement portfolio is everything other than our homes, cars and boats and the checking account that we use to pay our bills which typically has only $3-10k in it

 

[Mr. Tightwad]

67%. RE has been good to me.

 

[qwerty3656]

5% in REITS. I had more, but I'm not confident that Office and Retail are coming back.

 

[ivinsfan]

Probably 75% but it's farmland, so in my mind it's kind of an annuity...does double duty IMO...the annual rental income will cover a huge percentage of our retirement budget.

 

[RobbieB]

Zero

 

[Alex The Great]

Do we count primary residence as RE investment? It is 50% of the NW. Other than that, 10% in REIT.

 

[pjigar]

About 50% of invested portfolio in SFH and Multifamily RE. I keep trying to bring RE holding to 40% but it always grows faster than what I contribute annually to my stocks! Crazy.

PS: I am not counting primary home which is a large acreage.

 

[ncbill]

Zero because of the below.

I am currently managing a property owned by a relative though I cannot really call it a rental since the tenant (former long-term employee of my relative) no longer pays rent since at this point in their life they can no longer work & so can't afford to pay for both rent & groceries.

Since the house is supposed to go to the tenant anyway on the death of my relative I've been pressuring them to go ahead & give it away now...the tenant could then sell it at today's high prices & live off the proceeds for a few years at least.

 

[Alan]

Zero

 

[Freedom56]

Real estate represents about 30% of our total portfolio not counting our primary residence. We own three properties free and clear (our primary residence plus two others). We bought condo our in Florida in 2011 with the intention of flipping it and it has appreciated to four times our purchase price since we bought it. We have not rented the property and use it when we feel like going to Florida. We also own a property in Switzerland (near Lausanne) which was given to us by the generosity of my wife's parents back around 1996. We have sunk about $480K into updates and improvements over the past 25 years. I always complained how expensive property is in Switzerland but prices just keep going up. It's a triplex with two apartments at around 2400 sq/ft and a top level studio apartment which is about 1400 sq/ft. We rent out two of the three apartments and use the other when we visit my wife's family. My SIL lives next door and helps manage the property. If you buy real estate in a high growth and high demand location, it is a pretty solid long term investment.

 

[Another Reader]

Majority of the assets are in rentals. The remainder are in equities and cash. A small amount in bonds, via Wellesley and Wellington. However, I have pensions, social security, and an inherited IRA with RMD. So the income streams are diversified.

 

[disneysteve]

Zero

 

[N02L84ER]

Zero

 

[38Chevy454]

1-2% for me.