Are you interested in rental property assets? A great way to utilize retirement funds in your retirement plan with Midland IRA is to take advantage of our ability to administer real estate assets such as properties with income and expenses associated with them. While most plan administrators and custodians do not allow for privately held assets, this is Midland’s niche. And it’s something we excel at, since real estate is one of the most popular holdings in self-directed IRAs.
While real estate investments include many things, one way many investors earn income is through rental property assets. The right commercial or residential property, or even a vacation rental, has the potential to produce reliable monthly income. And, when your IRA owns that property, all rental income derived from the asset accrues on a tax-sheltered basis to build wealth for your retirement.
The idea of self-directing your retirement plans is to gain control of your investing funds and decisions. You gain the freedom to invest in things you know and understand—and if your niche is rental property, using your retirement funds to purchase these assets could very well help you build the retirement income of your dreams.
How do you go about purchasing real estate in your IRA? Open a self-directed retirement account with Midland IRA.
You can then fund the account by transferring or rolling over funds from another retirement account. Once your account is funded and you find a property you want to purchase, all you do is submit an offer in the name of your IRA (Midland IRA Inc. FBO Client Name #Account Number). After the closing is complete, the property is now owned by your IRA account.
Before acquiring rental property assets, understand that all expenses for the property (including maintenance and repairs) are required to be paid with IRA funds and the rental income must be deposited directly into your IRA account. This income maintains a tax-deferred status until you decide to remove the funds from your account, which must be distributed upon retirement unless you want to get hit with heavy penalties and taxation for early withdrawals. No one wants that, so the rule-of-thumb is to maintain a successful rental property as long as you can in your IRA to earn as much income as you can for retirement. However, if you do decide to sell, the gains from that sale would also enjoy a tax-deferred status until you retire.
Rental property assets are a great way to add diversity to your portfolio—diversity that is critical to the success of your retirement planning endeavors.
Want to learn more? Contact Midland IRA today!