Own multiple properties? How to simplify your real estate investments before retirement

Ahhh, retirement. Time to relax on the golf course or travel to exotic lands. But if you own multiple investment properties in numerous jurisdictions, your real estate holdings may become a burden in retirement, consuming both time and money.

“Decisions about how to handle real estate investments prior to retirement are extremely individual, but in general, investors need to consider what their cash flow will be like in retirement and how they want to handle their real estate investments in the context of family dynamics,” says Dean Deutz, a private wealth consultant with RBC Wealth Management–U.S.

But before you surrender and sell all your investment property, consult with your financial advisor and explore potential solutions. Here are three tactics to consider:

1. Hire professional help

Many real estate investors start with one or two residential properties and then eventually find themselves in their 60s or 70s with a portfolio of property investments.

“There are several ways to simplify your investments as you prepare to retire, but I always recommend that at least by your early 60s, you should be talking to your kids about whether they have an interest in partnering with you to manage the properties,” Deutz says.

If not, you can look into hiring a property manager for each place or an asset manager to oversee your whole portfolio. Property managers typically charge eight to 12 percent of your rental income.

“Clients often want to wait until they are 80 to sell their property, so it works well for them to hire someone to manage their properties, or to own property that essentially runs itself and just generates automatic monthly rent checks,” Deutz says.

One option for people who want to simplify their investments—yet stay in real estate—is to transition from residential properties to commercial buildings, since commercial properties tend to require less hands-on involvement.

2. Simplify by selling

While selling your real estate investments and investing the profits elsewhere may seem like the easy option, Deutz warns that divesting yourself of property must be handled with caution.

“You have to be careful of the timing and the tax consequences of selling,” he says.

Investors should evaluate their portfolios to see that they have the appropriate diversification of locations and property types.

“You need to decide which properties to sell while you’re in your 60s, and which properties generate the most income that you could use when you’re fully retired,” he says.

Deutz adds that while some investors may need to reduce their exposure to real estate if their portfolio is heavily invested in property, they still need to consider cash flow.

“You need to think about where your income is coming from in retirement, such as investment income, pension payouts, IRA or 401(k) distributions, annuities or rental income,” Deutz says. “You can weave all that together to decide when or whether to segue out of real estate.”

3. Create an LLC

Pre-retirees who decide to keep their property—but want to build in protection for their heirs and their investment portfolio—can choose between a Limited Liability Corporation (LLC) or a Family Limited Partnership (FLP). Deutz says most people opt for an LLC, but the decision depends on state laws, local customs and attorney preferences.

“We worked with an 80-year-old woman who owns property in Georgia, South Carolina, North Carolina, Florida and Texas,” Deutz says. “In her situation, it made the most sense to create an LLC for each of her properties in order to avoid probate in each state.”

Retirement planning and estate planning are closely linked. Deutz says some families who think they are making decisions to simplify their investments around this time actually make them more complicated.

“Some people think it’s a good idea to go to the courthouse and transfer the deed to each property they own to their kids,” Deutz says. While it’s easy to re-register your assets, this can actually have unintended consequences and possibly lead to future family disputes.

“If the properties are unequal in value, the heirs could end up in a battle,” he adds.

That’s why many families opt for an LLC, which provides shares so that each family member owns an interest in the LLC rather than an individual property, Deutz explains, adding that an LLC also provides better protection for your assets since the properties are owned by the LLC and not by individuals.

Another benefit of an LLC is that you can transfer shares among family members while the original owners are alive and after they pass away, Deutz says.

Even if you have a separate LLC for each property, you can roll them into one master LLC or a revocable trust to simplify your real estate investments.

“The main thing to consider during your retirement planning is whether your objective is to sell your property and move into retirement without the necessity of hands-on involvement, or to leverage your property as part of your investment pool after retirement,” Deutz says.

If you’re uncertain which strategy is best for you, your financial advisor and attorney can help you restructure your property portfolio to suit your needs.

Article was updated in August 2025.