Investing in real estate using retirement funds has become one of the most popular investments permitted in a self-directed IRA. There are trillions of dollars in IRA accounts that could potentially be invested in real estate. Self-directed IRAs have many benefits, which is why you should use your retirement funds to purchase your next investment property.
- Your real estate investment is in a tax-sheltered account. This is a great benefit because all income and gains inside the account grow tax-free. The money that you saved in taxes can now be used towards a better piece of real estate. When you’re ready to sell your property all sale proceeds are deposited back into your self-directed IRA tax-free until you’re ready to make your next investment.
- Are you lacking funds to purchase your investment property personally? Your self-directed IRA can partner with you personally to make the purchase. For example, your IRA can own 50 percent of the investment and you personally could own 50 percent, all income and expenses would be split 50/50. This is a great source of income that you may not have even considered. This also applies if you don’t have enough funds in your retirement account to purchase the investment property you want. You can personally own a percent of the property until your IRA can purchase it on its own. Your IRA also has the option to partner with people other than you personally.
- Investing in real estate using your self-directed IRA is a great alternative investment to grow your retirement savings. Typical IRA administrators only allow you to invest in stocks, bonds, and mutual funds which can sometimes feel like a never ending roller-coaster. Real estate is a solid investment that has the potential to build your savings while diversifying your retirement portfolio.
The process to do this is simple! To get started simply open an account with Midland Trust. Once the account is open you’ll need to fund the account by doing an IRA to IRA transfer, Rollover, or by making a contribution. After your account is established and funded you can make your real estate investment. The titling of the property would be written in the name of your IRA and all income and expenses would flow through your IRA account. Another great benefit of a self-directed IRA is that when you no longer want to invest in real estate you have a ton of other alternative investments that you can choose from such as notes, precious metals, futures and forex, and oil and gas rights.
The next time you decide to purchase an investment property, consider doing it in a self-directed IRA. Contact Midland today!
This article was written by Brenda Whetsell. To learn more call 239-333-1032.