Growing Interest in Real Estate as a Retirement Savings Strategy

Every year, more and more investors are beginning to rely on the benefits of alternative asset types as a smarter, more stable way to invest. While the financial crisis of 2008 left many investors weary of putting trust back into the stock market, it also brought about smart, new investment strategies for IRA account holders.

One of the growing primary investment vehicles individuals are using for saving is a self-directed IRA invested in real estate. With the stability of the real estate market as opposed to the stock market, an IRA invested in real estate has more potential for growing wealth and retirement savings through compound interest than other traditional or alternative investments. Compound interest thrives in the tax advantaged IRA account, but this is even more pronounced with a stable investment like real estate.

There are many benefits to investing your savings in real estate, not to mention countless options on how exactly to approach a real-estate oriented IRA. One benefit is that investors don’t have to limit themselves to physical real estate properties. There’s also options for real estate related assets like REITs, private mortgages, property rights, and many more that wise investor can utilize for their retirement saving strategy.

Some other benefits that are leading so many to pursue this investment strategy include substantially lower property taxes on most real-estate investment properties, the opportunity to purchase your future home through buying the property and renting, the option for an undivided interest to split the ownership of the property, and many others can be explored further here.

The bottom line for any IRA account holder looking into any investment is having the knowledge to make sound financial decisions. People in the real estate business are the ones who can benefit most from this strategy, as they know the market better than an average person, but that doesn’t mean non-real estate professionals can’t find just as much success in their retirement.

In fact, one of the reasons real estate is starting to pick up exponentially as a smart investment is because compared to other financial strategies, learning the knowledge to make smart decisions in the real estate market is comparably more accessible.

However, the most important factor when it comes to investing in real estate is to keep in mind the regulations that state a disqualified person, meaning either the account holder or any direct ascendants or descendants, cannot interact with the physical property in which he invests. This is in place so that the benefits of an IRA are not taken advantage of for the account holders benefit.

Final Note

Like any financial decision regarding your self-directed IRA account, dedicated researching and planning should go into any final decision that impacts your retirement strategy. There are numerous reasons to consider real estate as part of your investment portfolio. If you’re ready to look into the possibility of utilizing real estate as part of your retirement investment, IRA Innovations can help.

 

About Bill Gulas

Now in his 10th year as a Self Directed IRA administrator, Bill Gulas is passionate about assisting clients who desire to accumulate wealth with their retirement dollars, investing in what they know and understand, and accumulate that wealth tax deferred or in the case of a ROTH IRA, tax-free. You can connect with Bill on LinkedIn, Twitter or Google+