The term “F.I.R.E.” has picked up steam over the past several years, with young people being inspired by its message – “Financial Independence, Retire Early.” It’s an appealing offer, and many people in their 20s and 30s have already managed to quit work for good by practicing the lifestyle. One of the most popular ways that people are achieving the goal is by investing in real estate.

On average, the typical worker in the US retires when they’re 64 years old, and “full retirement age” for Social Security purposes isn’t until three years later. But that system is being challenged by financially savvy young people who have chosen a different path.

A quick Google search for “F.I.R.E. movement” will lead you to a plethora of results, many of which contain beautiful photos of young people traveling the country without a care in the world. 

Traditionally, the F.I.R.E movement is defined by committing to strict savings (typically 50% to 70% of earned income) and smart investments while a person is still employed in the workforce full-time. The ultimate goal is to live off small withdrawals from investment portfolios and/or passive income after retiring early. 

It probably comes as no surprise that many people see real estate as the answer, considering it’s one of the best forms of passive income out there. Although investors do need cash for a down payment when purchasing a property, they can use the bank’s money for the rest. When a smart investment is made, this leveraging of cash is an incredibly smart and low-risk way to make more money. 

Most F.I.R.E. followers typically get started in residential real estate, and there’s absolutely nothing wrong with that. But many turn to commercial real estate once they understand the ins and outs of investing. This is because the returns are generally higher with commercial real estate, and the leases are longer (minimizing turnover costs and vacancies). 

If commercial real estate investing and the prospect of retiring early sound appealing to you, then your next step is to do your research. Bad investments are all over the place, so you need to be educated before taking the plunge. Your first steps will be to investigate rental markets, find the right commercial property, determine the expected rental value of the building, calculate the monthly mortgage and any additional monthly costs, and get an inspection of the building. 

Just remember – the right investments can be cash cows, but the wrong investments can leave you in a dark financial hole. Be patient, educate yourself, and lean on professionals who can help you learn the ropes.

Here at Kronos, we love to “talk shop” with commercial real estate investors in San Diego. We’re always here to answer your industry-related questions; we love commercial real estate investing and providing outstanding property management services to our clients. 

Give us a call today at 619-488-7870 or 858-956-5983. We would love the opportunity to be your San Diego property manager!