Considering the fact that the world’s traditional investment markets have consistently demonstrated their volatility in recent decades, many investors are considering new ways to avoid the highs and lows of the stock market and are exploring Self-Directed IRA real estate rules as a way to diversify and adopt new wealth building strategies.
“Unlike stocks and bonds, which are intangible, people can see and walk on real estate,” wrote Joel Cone for the U.S. News & World Report “Investing” section. “Investments have ranged from income-producing properties (both residential and commercial), to real estate notes, mobile homes and even boat slips. Any form of real estate that has a deed or some evidence of ownership with it, including farmland, timberland, vacant land, raw land, foreign real estate, gas and oil royalties, all of these present good investment opportunities.”
Instead of feeling caught up in the never ending – and often extremely volatile – ebb and flow of the traditional stock market, why not consider rolling retirement funds into a Self-Directed IRA account and putting the money to work for you in a variety of real estate investments? Whether you are nearing retirement age or simply want to learn how to retire early, buying real estate with an IRA is one of the most innovative wealth building strategies available today.
“Direct real estate investing is becoming an increasing option for investors eyeing retirement and who want to take advantage of real estate’s return potential and its abilities as a portfolio diversifier and inflation hedge,” wrote Investopedia. “In the form of a Self-Directed IRA, investors are now able to invest directly in real property, mortgages, private placements and other non-traditional assets.”
Of course, the number-one motivator for buying real estate with an IRA is to make a great return on investment (ROI). What’s more, since your hard-earned money isn’t sitting in a traditional brokerage account, you don’t have to pay crazy fees and spend time worrying about whether or not the market is going to tank again. With real estate, you are much more in control of the asset, since it is real tangible property, making it one of the most predictable wealth building strategies available; especially if you buy property in one of the world’s best places to retire.
“Potential investors should meet with a financial planner, an attorney, or both before investing in a property,” wrote Realtor.com.
Here’s how it works in brief: First, all retirement account assets need to be in a Self-Directed IRA account, but although you will make all the real estate investment decisions, you still need to work with a custodian who is authorized to make the investments on your behalf. Essentially, a custodian is a company that is only there to manage the transaction, the paperwork and the legal reporting.
“Putting your hard-earned IRA assets into a Self-Directed IRA can be a very good idea to grow long-term, tax-deferred or tax-free assets,” wrote Forbes. “If you want to buy a rental property, you would open an IRA custodial account, transfer cash from an existing IRA account – or possibly 401(k) – into the custodial account and then purchase real estate under the IRA account name.”
Investors are also permitted to sell real estate in a Self-Directed IRA account, so it can be used for flipping properties, although there are limits to the number permitted each year. Regardless, buying real estate with an IRA account – whether you are planning to rent the property, hold on to raw land in the path of growth or flip the property – it remains one of the most successful wealth building strategies available today, providing an excellent opportunity for tax-deferred or tax-free growth with a high return on investment.
Would you like to know more about how to invest in real estate using an IRA account? Click the link below and discover why buying real estate with an IRA in an ideal location can diversify your portfolio and provide a hassle-free revenue stream to dramatically improve your ROI!