Retirement is looming and you need a solid plan for how you’ll fund all the things you want to do. Maybe you’ve planned ahead and started saving and investing in your 20s. Maybe you’re three years from retirement and suddenly realizing you need to get things in place. Whatever point you’re at, there are some things to consider about real estate and your retirement assets that can help you as you enter this new phase of life’s journey.

1. Create Streams of Income

Only 52 percent of Americans say they’ve prepared for retirement income. One way you can fill that gap is by investing in real estate and creating multiple sources of revenue in retirement. You can even hire a property management company to handle daily tasks and maintenance of your properties. This is the key to transitioning real estate into a passive form of income.

However, keep in mind that to create a $50,000-per-year profit, you’ll need $4,000 a month in profit. And you’ll need to earn that after you’ve paid out all expenses, including repairs, costs to advertise, a percentage to your property manager and insurance and property taxes. You may need to manage a number of properties to hit those figures.

2. Build Equity in Your Own Home

For other retirees, real estate investment falls more into the category of owning their own home and building equity in it. On average, homes do go up in value. Over time, the home you own today will be worth more and more. If you pay off your mortgage, you can simply sit on that investment and let it grow.

That equity has pros and cons. If you get to the point that you want to travel full-time, then you can sell your home and take the equity to buy a recreational vehicle or pay to travel from place to place. Or you can buy a smaller home and place the difference in savings (this may impact your taxes, so check with a CPA about capital gains and whether you’ll owe).

3. Consider Unplanned Expenses

Having enough money to live on in retirement is tricky to calculate. You may get a pension, social security or have other investments that factor in. Unexpected expenses also create a lasting impact, such as a sudden loss of income or extended illness. Seventy-five percent of retirees need some type of long-term care.

Another thing to factor into whether you should invest in property is how an extended illness might impact the cost you’ll pay to go into a nursing home. If you have assets such as apartment buildings, the nursing home costs may eat up everything you’ve worked so hard for. On the other hand, creating a steady stream of real estate income can provide for you in an emergency. Your best bet is to talk to a financial adviser about the best course of action to ensure you can afford long-term care if needed.

4. Factor in Reward and Aggravation

Before you make the decision to become a landlord, factor in both the rewards and the aggravation. The reward is that you’ll be able to build a residual income that will come in year after year, even after you retire. Most homes also will build equity, making it a fairly safe long-term investment. Once you sell, you’re likely to get your money back and then some.

However, there are many aggravations that come with owning rental property. You’ll occasionally get tenants who will tear up your property, not pay their rent or your property could sit empty. If you don’t know much about renting, you may miscalculate how much certain things will cost. There are pros and cons to real estate as a retirement asset, which is why many inexperienced investors are advised to hire management professionals.

Part of a Bigger Picture

As with most investments, real estate should be part of a bigger picture in your retirement portfolio. It’s never a good idea to put all your investments in a single category. Markets change and what works today may not work tomorrow.

If you create a diverse portfolio, however, real estate is a great way to add to your retirement income and invest in something that grows in value over time. While it can be challenging to get started, with a few properties and the income to hire management, real estate has the potential to serve your needs for many years.

• Holly Welles is a real estate writer and the editor behind her own blog, The Estate Update. She loves helping readers figure out how to utilize the real estate market for their own financial benefit. You can catch more curated advice on her Twitter feed @HollyAWelles.