For retirement income, there should be three overall goals for investors. The income for retirement must be secure, meaning the investment is in an asset for which there will be always be a demand. It must increase with inflation so that rising prices over time do not decrease the purchasing power of the retirement income. To maintain the strength of the income stream, the underlying asset should also rise in value over time. For these objectives, rental real estate is the best investment for providing retirement income. Rental real estate provides the most secure payment stream of any income investment. The dividend of a stock can always be slashed or halted. Bond payments can also be dropped. But the rent must always be paid. Rental income is not subject to the whims of the board of directors of a publicly traded company. The one payment that will always be made is to ensure one’s home: the rent check will always be cut. The Only Asset to Rise in Value During The Great Recession That was proven over The Great Recession. Millions of homes went into foreclosure as mortgage payments were not made. Companies considered to be blue chip investments such as Ford Motor Co. (NYSE: F) and Citigroup (NYSE: C) had to drop the dividend payments. But over the course of The Great Recession, rental income continued to flow to the owners of the property."EquityBuild It was basic supply and demand: fewer could afford their mortgage payments. So they left their homes and moved into a rental unit. From this, the pool of renters expanded immensely. As a result, rents charged rose during The Great Recession. What The Great Recession proved is that there may not always be a desire to own a home, but there will always be a demand for one, resulting in rental real estate becoming even more valuable. Due to rental real estate becoming more in demand, the rents charged rose during The Great Recession. It is a unique investment indeed that produces a greater income stream in the midst of a crippling recession that ravaged so many asset sectors. But for rental income, it was nothing new: the historic rate of rent increases has been around 4 percent. But this figure can be increased with the right rental real estate. If turnover is planned for, rents can be increased on a continual basis. The most obvious type of rental real estate for this type of income increase would be for university students. Turnover will be on a yearly basis, which allows for annual rent increases. Even though there will be turnover, there will always be a strong demand for rental housing as students at the university provide an anchor tenant base that is ideal for increasing rents. Along with the rents rising over time, so have the value of the properties. Generally, the price of real estate will increase. According to the National Association of Realtors, the price of existing homes increased at a rate of 5.4% annually from 1968 to 2009. From that rise, the price of a home will double about every twelve years. If your retirement were to last for 24 years, that would result in the value of the home doubling in value twice. A savings account with a 1% interest rate would take 72 years for the principal to double in value, by contrast. As another point of reference, the Dow Jones Industrial Average just returned to where it was back in 2008, before the onslaught of The Great Recession. For another salient fact about stocks when compared to rental real estate, the average dividend yield now is around 2%. Due to such a low dividend yield and interest rates paid by certificates of deposit and bonds, rental real estate is likely to increase even more in value. Federal Reserve Chairman Ben Bernanke has stated that a low interest rate environment will be maintained until at least 2015. These low interest rates being paid by savings accounts and bonds result in rental real estate being much more valuable than other investments that provide income to the holder. This will only increase due to the low interest rates that will remain for years. Increases in the rents being charged with make the investment properties worth even more money in the years ahead. Owning Rental Real Estate is The Plan According to a survey by Fidelity Investments, about three-quarters of those preparing for retirement had not yet “determined an asset strategy for managing their income in retirement and while seeking continued growth for their savings.” (1) "EquityBuild Rental real estate is the one investment that can take care of that for retirees. There will always be a demand for housing. In adverse economic conditions, the demand will increase. As The Great Recession demonstrated, periods of low or no economic growth lead to more renting homes. From that, the rents rise. Rental real estate can also be purchased to maximize the increases. College towns are ideal for this with the constant turnover and strong, steady demand for housing. As history as shown, rents will rise over the years. Along with the rents increasing, so will the value of the property. Based on historic trends, it should double about every twelve years. That provides for the “continued growth” that so many pre-retirees are still seeking. Everyone wants to enjoy their retirement years. Having the money do this is a necessity for getting the most from one’s golden years. Owning rental real estate can go a long way to making that possible with the stream of secure, increasing income it provides from assets that rise in value over the course of the retirement period. by, Jonathan Yates: EquityBuild News Contributor (1) source "Invest