When he was 39, Mark Brandemuehl bought a home in Colorado properties with the intention he'd retire there.

But until the day comes when he leaves the workforce and enter retirement, he plans to rent out the properties and have them pay for themselves until he is ready to move in. With rock-bottom home prices and mortgage interest rates hovering around 4%, Brandemuehl, who is on the hunt for his third property, isnt the only one with this idea.

A 2011 survey by vacation rental booking site HomeAway.com shows 14% of vacation rental owners purchased their home to be used during retirement and are renting it out in the meantime. Some homeowners rent out their second home for a limited time each year while others seek longer terms with one-year or longer leases.

The National Association of Realtors reports rental income influenced 71% of second home buyers who purchased in 2011, nd 91 percent of them plan to rent their new purchase within 12 months.HomeAway.com members generate $28,000 annually by renting their home about 19 weeks a year, and half of the sites owners can cover 75% or more of their mortgage by renting to travelers.

Renting out a house until retirement rolls around offers many advantages. Real estate yields are usually much higher than the average stock market return, and buying a retirement home for the future can provide enough cash flow to pay for and even completely payoff the home by the time you move in, says Brandemuehl, who is also vice president of real estate site Movoto.com. Retirement and vacation destinations usually provide a reliable, gainfully employed stable of tenants; Brandemuehl's properties have been vacant less than six months total in the last seven years.

But being a landlord requires a lot of work and extensive planning. You could potentially become upside down on your investment or encounter heated or confrontational situations with tenants, says Mia Melle, a broker with property management firm RentToday.us.

You might also decide not to live where you bought the property, or the property could unexpectedly become vacant or misused. Higher-end homes, are harder to rent, according to Brandemuehl, so be prepared to advertising heavily.

Here are six expert tips to consider before buying a retirement home to rent:

Run the numbers. Renting out a second home can be a great opportunity if the rental income covers your mortgage, taxes, insurance, and provide an additional cushion for unexpected expenses, says Jean Allard, senior real estate specialist and vice president of Keystone Real Estate Group. But experts warn that you shouldnt buy a home unless you can afford the payment on your own in the event that there are vacancies. Ask a real estate agent how much your home could command in the vacation rental and long-term rental markets.

Be mindful of aging and rentability. Find a home with a single level so that stairs will not be an issue, Allard says. A retirement home should be ready to accommodate physical needs as they change. It should also need minimal work. Entry-level homes that are three bedrooms, two baths, around 1,300 square feet, and near (and not in) communities with Homeowners Associations tend to rent well, says Aimee Elizabeth, real estate investor and author of Poverty Sucks! How to Become a Self-Made Millionaire. You could buy a four bedroom, 2,000-square foot house that might cost you twice as much, but you wouldn't get twice the rent. You'd be lucky to get an extra $100 to $200 a month, she says.

Excerpt from:
Renting to Retirement: Six Factors to Consider