Divesting Your Real Estate Portfolio in Retirement

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For many high-net-worth Canadians, real estate has long been a powerful wealth-building tool. Whether through a vacation property, rental units, or commercial real estate, these assets have often provided appreciation, cash flow, and diversification.

But as retirement approaches, the question becomes: should you keep your properties or start divesting them?

In this post, we’ll explore:

• The main reasons to keep or sell your properties

• Key questions to help guide your decision

• My own experience as a real estate investor

• And how these choices impact your retirement success

Why You Might Keep Your Properties

If you’ve experienced steady appreciation, positive cash flow, and enjoy the process of managing your properties, holding onto them can make sense. Many retirees continue to own real estate because:

• They’ve built equity and enjoy consistent rental income.

• They’ve outsourced property management, reducing the workload.

• They have sufficient liquidity elsewhere, so they’re not forced to sell.

• There’s an emotional connection to the property perhaps it was your first investment or a family legacy.

Real estate can also play a key role in wealth diversification, providing a tangible asset outside of traditional markets.

Why You Might Choose to Sell

Time is often the biggest reason retirees choose to divest.

In my own case, I owned a rental property in Saskatoon for about seven years. While it provided cash flow, I found myself spending more time dealing with maintenance, tenant issues, and unexpected expenses than I wanted to. Eventually, the tradeoff between time and money just didn’t make sense.

Selling allowed me to reclaim my weekends, spend more time with my family, and focus on my advisory business. For many retirees, simplifying life is a greater reward than collecting another rent cheque.

5 Key Questions to Ask Yourself

If you own rental or investment properties, consider these before making a decision:

1. Do you still want to manage your rental business after retirement?

2. Would you enjoy it enough to stay busy or is it time to hand it off?

3. Do you have enough liquidity to fund retirement and cover property expenses?

4. Is your retirement success too dependent on real estate? (Consider diversification.)

5. Would you prefer a more passive way to invest in real estate? (Such as REITs or real estate funds.)

   
   

Integrating Real Estate into Your Retirement Plan

Whether you decide to keep or sell, the goal remains the same a sustainable retirement income for life.

At Fundamental Wealth we incorporate real estate holdings into your broader retirement plan. That includes:

• Income optimization

• Tax reduction strategies

• Planning for the sale or transfer of properties

• Coordinating CPP and OAS start dates

No two retirement plans are the same, which is why we developed the Fundamental Retirement Plan (FRP) process to help you make these complex financial and emotional decisions with confidence.

Action Items

If you own a real estate portfolio:

• Take inventory of each property’s performance, cash flow, and upcoming maintenance needs.

• Consider how your real estate strategy fits into your overall drawdown plan.

• If you’re thinking of selling, start planning early timing matters for both taxes and retirement income.

When it comes to retirement, don’t leave these decisions to chance.

Make a plan so you can retire with confidence.

All comments are of a general nature and should not be relied upon as individual advice. The views and opinions expressed in this commentary may not necessarily reflect those of Harbourfront Wealth Management. While every attempt is made to ensure accuracy, facts and figures are not guaranteed, the content is not intended to be a substitute for professional investing or tax advice. Please seek advice from your accountant regarding anything raised in the content of the podcast regarding your Individual tax situation. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.