Self-directed IRAs have been growing in popularity over the past decade, largely because of growing concern over the stability of Wall Street. Among the many investments a self directed IRA can participate in, real estate is among the most popular. Let’s discuss why this is a growing strategy, by looking at 4 benefits investors gain with a self-directed real estate IRA.
#1: Investing in What You Know
You would think that most financial advisors are savvy and can analyze the underlying assets in your IRA portfolio but the truth is they usually can’t. So it’s no surprise that most people with an IRA are not fully informed about conventional investments like stocks, bonds, mutual funds and CDs. If you find yourself managing your IRA portfolio purely based on Risk vs. Reward real estate may be a more practical approach.
Instead of allowing your money to be sloshed around on Wall Street consider investing into something you can truly understand like real estate. Real Estate investors know it doesn’t take a PhD in finance to make a fair return on investment in property. You can cash flow real estate properties while they appreciate over time or you can turn a quick profit with simple cosmetic work on ugly houses. From real estate lending to tax liens you will find there are many angles a real estate investor can take. Even if you don’t know much about real estate investing everybody has access to real estate professionals and consultants. Either way, real estate is an investment where information is accessible and a lot more simple than most other investments.
The tangible presence of real property provides more stability and clarity of worth than a diversified hedge fund so its often a “no-brainer” for IRA holders – but few know where to start. Whether you are an experienced real estate investor or just learning your investment options, investing in this proven asset can best be facilitated through a self directed real estate IRA.
#2: Get the Same Tax Benefits of a Traditional IRA
Although many investors may understand the profitability of real-estate investments, very little IRA holders are aware they can free up retirement dollars for real estate investing. Better yet, they can receive the same tax benefits of an IRA with these investments. Instead of cashing out an IRA and paying hefty taxes and penalties, all you need to do is convert to a self-directed IRA LLC and receive the same tax benefits you get with a traditional IRA.
Tax-deferment, tax-free profits, and large tax deductions help investors create more profitable investments over-time with their SDIRA for real estate. So, not only do they have more control over the management of their investments, but also retain the tax benefits a traditional IRA brings.
#3: Use Your SDIRA to Buy Real Estate
Investors can purchase new real-estate investments from their SDIRA, and receive the tax benefits it brings as well. Having the option of using the wealth from inside their SDIRA to invest in real estate opportunities, gives investors the financial leverage to grow their retirement exponentially.
With accessible and usable funds that can be used to leverage further real estate investments (within a tax-free or deferred environment), investors will greatly benefit from having a self-directed real estate IRA. Any positive cash flow from rent or sales is tax-free, and there’s no time limit for holding property.
Basically, by using a self-directed real estate IRA, investors are gaining tax benefits while still having the access to the wealth needed to manage their investments.
#4: Real Estate Diversification
When an investor decides to set up a self-directed real estate IRA, they can take advantage of the diverse range of real estate investments available such as:
- Foreclosure Property
- Foreign Real Estate
- Raw Land
- Real Estate Options
Basically, any real estate opportunity that presents itself can be facilitated through a SDIRA. This ability to diversify, allows for greater creativity and control for investors with real estate expertise (or access to expertise).
Choosing the Right Partner to Set-Up Your Self-Directed Real Estate IRA
Once an investor decides they want to set-up a SDIRA for their real estate investments, choosing the right facilitator is the next step. New Standard IRA is a leading option for investors who want to have a “truly” self-directed IRA.
We help investors set up a LLC, provide ongoing support, and facilitate all necessary means to create a smooth process. We provide an experienced, qualified, and holistic service to guide and facilitate every step of the process for our clients.
Our checkbook IRA service offers investors the control to invest without hassles and red tape, while our decade of experience gives us the ability to give the answers needed at every turn. Investors who are ready to get started with their SDIRA will find a friendly team of qualified experts to help, along with all the tools needed to truly take control of their SDIRA investments. If you have any questions about a SDIRA for real estate, please contact us today.