An individual retirement account (IRA) is an excellent investment account individuals use to save for retirement. Self-directed IRAs are plans that give account owners total control in choosing their own investments and further allow these individuals to invest in what they know and understand. Self-directed IRA administrators like Midland IRA provide critical administration for clients to maintain account compliance within IRS regulations. This enables you to spend your time exploring profitable investment ventures. While self-directed IRAs can hold many alternative investments, by far the most popular asset in these accounts is real estate, hence the name real estate IRA.
Benefits of a Real Estate IRA
Real estate is a popular investment for anyone who is knowledgeable in that area and willing to jump into the action. Successful assets offer the investor a very favorable ROI, not to mention that property investments can serve as a reliable hedge against unpredictable inflation rates in the stock market.
Investments permissible in self-directed IRAs include traditional assets, such as stocks, bonds and mutual funds. However, it is the large pool of alternative investments that attracts account owners. Real estate, precious metals, foreign exchange, private lending—and much more—are popular examples of alternative assets that can be acquired by using self-directed IRAs. Pertaining to real estate, you can purchase single-family or multi-unit homes, condominiums, or even unimproved land—anywhere in the world.
The Self-Directed IRA Administrator
The use of a real estate IRA requires the services of a qualified custodian or administrator. All self-directed IRA administrators provide crucial service for your account, as Investopedia states:
“Generally these trustees provide administrative services, such as maintaining records of contributions and other activity, filing required IRS reports, issuing client statements and providing information pertaining to the rules and regulations that govern IRAs (for example, the contribution limits and deductibility rules, the rules for distributions, and the penalties for early distributions).”
It is important to know that while there isn’t a limit on the number of investments allowed within a self-directed IRA, the types of investments your account can hold ultimately depends on the asset class your administrator services.
This means that you should look into the services of administrators before hiring one. Some administrators may not provide service for self-directed real estate IRAs.
Call Midland IRA
If you have any questions or desire more information about real estate in an IRA please contact our office today. Midland IRA serves the needs of many clients who own real estate in self-directed IRAs. We also offer free webinars and other events for investors to learn about the many other alternative investments available and how to use these accounts to successfully build wealth for retirement.
(Article Information and Image from House Your Retirement With Self-Directed Real Estate IRAs, Investopedia)