Your retirement may be a long way off, but if you’ve yet to start planning, you could find yourself in a financial bind. And you won’t be alone. Unfortunately, “the average working household has virtually no retirement savings,” according to the National Institute of Retirement, a nonprofit research and education organization.

So what can you do to avoid being average? Taking measures to diversify your portfolio among several types of assets is one important step, as is planning to maximize your 401K by enrolling in a company match.

But to retire comfortably, multiple streams of income are important. Many prospective retirees have found success by trying their hand at real estate investing - a great way to make money, once you’ve picked up some of the skills.

We spoke with a couple of seasoned real estate experts to learn the ins and outs of buying and owning investment property for retirement.

Tips to Get Started

If you’ve decided investing in real estate is the right fit for your retirement portfolio, be sure to get started carefully. Educating yourself is important so you don’t make a risky investment, said Burns, who recommends doing some research and taking informative seminars like those offered by The Norris Group in Riverside, California.

Hall-Bradley advised to be careful about taking out a mortgage if your finances simply can’t handle it. “I’ve seen investors not get a fixed mortgage and get something that balloons” in interest, she said, and then lose their property.

It’s also a common mistake for first-time, rookie investors to take out a mortgage thinking they can refinance for better terms later. “I would wait [until you can afford it], if you can,” Hall-Bradley said. “The mortgage is very important.” Before you apply for a home loan, be sure you know where your credit stands first so you know if you’re able to qualify.

You may also want to consider hiring a professional property manager who can help you deal with evictions and keep an eye on your nest egg, said Hall-Bradley.

The Pros of Real Estate Investing for Retirement

“Inflation hedge” is one of the first phrases John Burns, chief executive of John Burns Real Estate Consulting in Irvine, California, uses to describe the advantage of investing in real estate. Since various properties can be expected to maintain or increase their value over time, regardless of the value of a currency, it may be more worthwhile to invest in those as opposed to assets that may depreciate faster.

There is also the aspect of having a positive income stream, Burns said. “If you’re going to buy a house and rent it out, hopefully the rent covers more than your expenses, so you’ll have some income coming in.” Knowing you’ll be able to make ends meet, and perhaps even build credit as you make your payments consistently and on time, can take the burden off of someone who is facing retirement.

Another perk of investing in real estate is being able to take advantage of certain tax deductions, such as depreciation, Burns said. According to the Internal Revenue Service, some types of property, like buildings, can be reported on your tax return if they’ve been used for business or the production of income.

The Risks of Real Estate Investing for Retirement

Besides the real risk of not being able to attract tenants to a rental property, said Dana Hall-Bradley, a realtor in Osceola County, Florida, you may also have to contend with the cost of making improvements. That could mean having to replace outdated kitchen and bath fixtures, repair floors or install attractive features like a washer and dryer.

Another downside to investing in real estate can be dealing with the tenants themselves, Burns said. “Tenants can be a headache and a lot of work,” he admitted, especially if they fail to make their payments on time, become unresponsive or leave your property in poor condition.

Real estate is “not a passive investment,” said Burns, and it requires plenty of upkeep, both in terms of the legal and administrative paperwork and the maintenance of the property itself. If you aren’t prepared to be actively engaged in your property, he said, you may want to focus your energy elsewhere.

Bottom line: if you’re up to the task, real estate is a terrific asset to have in retirement. Remember to do thorough research before you buy anything, and consider hiring an inspector to identify any potential problems with the roof, foundation, or structure of the property you’re looking at. When done correctly, real estate investing is one of the best ways to produce a steady income throughout your golden years.

About the author: Jill Krasny is a reporter and editor at Credit.com. Prior to joining the company, she was a senior writer at Esquire and Inc. Magazine, where she covered a range of lifestyle and business topics. Her work has appeared in Mashable, Travel + Leisure and MTV.