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The conventional concept of retirement—leisurely games of golf, twice-yearly vacations, and drinking coffee at morning book clubs—is becoming as improbable as watching a unicorn foal graze in your back garden. That’s because very few people have the money to retire.
This has been brought into sharp relief by the investment bank Goldman Sachs Retirement Survey 2025, accompanied by the intimidating headline that Americans will need roughly $2.57 million to retire by 2043. This accounts for a 4% withdrawal rate, or about $100K per year (from conservative investing). That doesn’t mean you’ll be sharing yachts with Leonardo DiCaprio, but rather, living a modest middle-class life and still watching your pennies.
Being an investment bank, Goldman Sachs naturally arrives at this number through conservative stock portfolios. Of interest to prospective landlords starting their investment journey now is calculating how they could achieve the same outcome with rental properties.
You Can’t Mail in a Brick to Pay a Bill
Alex Langan, chief investment officer of Langan Financial Group in Harrisburg, Pennsylvania, told Realtor.com:
“The $2.57 million number from Goldman Sachs isn’t meant to be paralyzing. It’s meant to be a wake-up call. The gap between what most people are saving and what retirement actually costs is real, and it’s widening. Your home is a meaningful part of the answer for a lot of people. It just can’t be the only answer.”
That’s because mailing in a brick from your home to pay a bill is not an option, irrespective of the equity you have in it.
“You can’t pay your property tax bill with home equity,” Langan said. “You can’t cover a medical expense with it. You can’t use it to get through a rough patch without doing something specific to access it. And every way to access it has strings attached.”
Given that the $100K figure is not adjusted for inflation, while other expenses in the Goldman Sachs survey are, those six figures will have to go a lot further in the future than they do today. It’s also a reason real estate is an attractive proposition: The rents keep increasing while the debts decrease.
Various Scenarios in Today’s Market
Let’s plug in the $2.57 million investment number, producing $100K in cash flow in some of today’s markets, and see where we’ll end up in 2043. Bear in mind that the Goldman Sachs number assumes long-term compounding, not a lump sum, so we’ll apply the same assumption to the rental portfolio: Combine modest early cash flow with tenant?paid amortization and appreciation to build both income and equity over the next 17 years.
From Today’s Rents to $100,000 a Year by 2043
Clearly, buying one average-cost single-family home in any of these three markets will not get you to the yield you want by 2043. Rather, you will need to buy multiple homes (about 25 in Atlanta, 30 in Dallas, or 25 in Cleveland) to get you there (or any combination to arrive at the same numbers if you prefer closer markets, assuming a 2% rent growth per year).
Here’s how we arrived at the numbers:
Atlanta: A $300,000 Atlanta three-bedroom rents for roughly $2,500 a month, producing about $30,000 in annual rent and around $18,000 in NOI after 40% expenses. With 20% down and a $240,000 mortgage at 6.5%, that Atlanta property is a near-break-even cash flow proposition, with tenants paying down the principal over time.
Dallas: A $320,000 single-family home in Dallas renting for approximately $2,700/month generates about $32,400 in annual rent and $19,417 in NOI after 40% expenses.
Cleveland: A $160,000 three-bedroom home in Cleveland, renting for about $1,550, yields $18,600 in annual rent and roughly $11,160 in NOI.
If Atlanta, Dallas, and Cleveland properties each appreciate at 3% annually through 2043, their values rise to roughly $490,000, $523,000, and $262,000, respectively.
Over 17 years, tenants could pay down roughly one-third of the original loan balances, retiring about $80,519 of principal in Atlanta, $85,887 in Dallas, and $42,944 in Cleveland.
As you can see from the table, a roughly break-even cash flow today turns into around $10,971 combined cash flow per year by 2043 (about $3,796 + $3,285 + $3,890), on top of the equity you have built in all three properties. It’s way off the $100,000/year retirement scenario.
Market & property
2026 rent (mo)
2026 cash flow (yr, pre?tax)
2043 rent (mo, ~2% growth)
2043 cash flow (yr, pre?tax)
Atlanta – $300,000 SFH, ~3?bed, renting around $2,500
$2,500
? –$200/year (near break?even)
? $3,500/month
? $7,000/year positive
Dallas – $320,000 SFH, ~3?bed, renting around $2,700
$2,700
? $20/year (near break?even)
? $3,780/month
? $7,800/year positive
Cleveland – $160,000 SFH, ~3?bed, renting around $1,350
$1,550
? $1,450/year positive
? $2,170/month
? $5,900/year positive
The required down payment makes this prohibitive for most investors now.
Market scenario
Price per property (approx.)
Properties needed for ? $100K/year CF by 2043
Total purchase value
20% down payment needed now
Atlanta only
$300,000
25
$7.5 million
$1.5 million
Dallas only
$320,000
30
$9.6 million
$1.92 million
Cleveland only
$160,000
25
$4 million
$800,000
Multifamilies Will Get You There Quicker
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Buying this number of units as multifamily buildings—one small plus one mid-sized multifamily unit to get you to the same unit count—will need less of an upfront down payment and less overall management.
Small class B/C multifamily (four to 12 units) in secondary neighborhoods can trade around $110,000–$160,000 per unit in Atlanta and Dallas, depending on location and condition.
In Cleveland and similar Midwest metros, older small multifamily units often trade in the $70,000–$110,000 range.
Market
Units needed (? doors for $100K/year CF)
SFH path—total down payment
Multifamily path—total down payment (small + one larger)
Rough capital saving with multifamily
Atlanta
25 units
$1.5 million
? $644,000
? $856,000 less
Dallas
30 units
$1.92 million
? $504,000
? $1.416 million less
Cleveland
25 units
$800,000
? $450,000
? $350,000 less
Overcoming High Down Payments
This hypothetical analysis shows that buying small- and medium-sized multifamily buildings ends up costing less overall in down payment costs because of economies of scale. However, it does mean paying the entire down payment at once rather than spreading it out over several years.
Here are some strategies investors can use.
BRRRR
This chestnut never really goes away. If you’re OK with making no cash flow to begin with and willing to stick it out, the BRRRR method is the one tried-and-true method to recycle your cash and offset the money needed out of pocket from a down payment. You will have more success if you can quickly reduce your renovation expenses, rent, and financing costs. Your success depends on the speed with which you can BRRRR.
House hacking small multifamily
By living in one unit of a two-to-four-family home, you will qualify for a 3.5% FHA loan, which you could combine with a 203K renovation loan to fix up and rent out before moving out a year later, refinancing it into a regular mortgage, and rinse and repeat with another home.
Owner financing
Owner financing is a charm if you can find an owner willing to hold the note. You will likely need to make a down payment, but nowhere near the conventional 20%.
Financial partners
Finding someone to put up the cash and share in the equity and cash flow while you oversee the day-to-day running of the operation and find the units is a great way to keep your cash in your pocket while building passive income.
Government down payment assistance programs for multifamily housing
There’s a housing crisis in America, and the government is willing to help those who want to help alleviate it. That means there are numerous down payment assistance programs for low-income residents needing a place to live.
Buy in an Expensive Area and Trade Equity
If the idea of dealing with multiple tenants and all associated headaches for minimum cash flow does not appeal to you and you have access to a large down payment, there is a solution. Buying two properties in pricey, fast-appreciating areas and holding on for the ride could leave you with a chunk of cash to redeploy in a hands-off, conservative, non-real estate investment down the road.
Many Brooklyn residents doubled their money over a 10-year period. That means buying a brownstone for $1 million, living in it, and selling it for $2 million. Many of these townhouses were small multifamily homes, which meant the tenants paid most, if not all, of the mortgage.
Owning two of these would result in a $2 million windfall (excluding capital gains, some of which could be offset). Getting to that magic $2.5 million in cold, hard cash and then investing in conservative, low-risk bonds at 4% yields would get you to your magic $100K in passive income without the headache of tenants, toilets, and termites.
Final Thoughts
It’s good to have a goal when embarking on an investment journey. Many people wish to make $100K in passive income and embark on a quest filled with hype from investment gurus and dreams of retiring within a few years of buying their first investment.
While that can occur—particularly in the short-term/vacation rental space in the right location—for conventional purposes, these numbers show just how hard it is to achieve with current interest rates and prices. Of course, we all hope that rates drop, but I had to go with rates as they stand now.
If you try some of the creative techniques mentioned here, like the BRRRR method, you must have cash on the sidelines and keep your regular source of income, because you’ll need it. This is a rocky road, especially early on. To succeed, it’s important that you maintain low expectations and stay focused on the long game.
