The world has changed, and money doesn’t stretch as far as it used to. That’s a hard truth for current and future retirees who are typically on a fixed income and must rely on their savings to fill in the gaps. Many of these older Americans are wondering if they’ve tucked enough money away in their nest egg to pay for living expenses and medical care for the rest of their lives.

If you’ve been scrambling to make sure you have enough money to live on in your golden years, then you’ve probably started thinking about unconventional solutions. For many seniors, one of the options for building their net worth is investing in real estate. But is this a good strategy for retirement? Is it likely to pay off in the long run?

Drawing on Equity Is a Common Solution for Many Retirees

As any good investor knows, diversification is typically a good way to protect your assets. Many retirees own property as part of their portfolio. As well as being a practical investment (you can live in it, after all!) real estate has the advantage of almost being a type of “insurance” for retirees. The prices on real estate can fluctuate quite dramatically, but a home holds value—value that can be accessed if it becomes necessary.

Drawing on home equity for a reverse mortgage is a common way for retirees to boost the amount of liquid assets they have access to. This is only a viable solution for seniors who have a home that is almost or fully paid off, and it can be very risky. It’s best not to borrow against the value of your home unless you are ready to downsize and buy a cheaper house, or you are unable to pay your normal living expenses. The money you gain using this strategy is typically free of federal taxes, unless the home has gained over $500,000 in worth.

Income-Generating Property Can Serve as an Alternative Solution

Income-producing properties can be a great option for retirees looking for ongoing income. This is especially true in up-and-coming areas or urban areas where people are often looking for rentals. Investing in an income-generating property can be expensive, but it can also be a good source of income during retirement. If you’re considering this option, it’s important to factor in other costs and responsibilities before investing. You’ll be responsible for repairs, taxes, and maintenance. You’ll also have to manage the property or pay someone to do it. These expenses can quickly eat up profits if you’re not careful.

If possible, it’s best to set up rental properties around 10 years before you retire. This will help you to smooth out any potential problems before the property or properties become a crucial source of income. The sooner you can start establishing your income-generating property, the better!

Location Is Everything, Increase Your Earning Power by Relocating

Some retirees simply can’t afford to live in their current city, or even their current state. 60-percent of recently polled retirees expressed that they’ve saved just enough to get by. If you need to accelerate your retirement savings, it might be a great idea to move to a tax-friendly state. A few states have no income tax, while others offer the benefits of no sales tax.

Depending on your situation, property tax rates in different areas of the country might make moving to another state or county make a lot of sense as well. Plus, if you’re thinking about investing in rental properties, you’ll want to be in a desirable area with low property taxes.

Think About Retirement Income Now

If you haven’t saved enough for retirement, and your Golden Years are a way off, you still have time to meet your post-career needs. One way to do that is to think about a career change to a more lucrative field. These days, a surprising number of adults are going back to school with only around 15 years left before retirement age. Studies show that professionals with a bachelor’s degree earn nearly twice as much as high school graduates. That increase in salary could help you save money for the future and even purchase investment properties or pay off your house.

Real estate can be a viable addition to a retiree’s asset portfolio. As with any investment, however, there is some risk involved. Before you decide to buy a home, relocate, or purchase an income-generating property, it’s important to consider both the pros and cons of such an important decision.