While the stock market takes investors on a roller coaster ride, turnkey real estate properties often provide the kind of passive income that keeps you well grounded. One of the advantages of a real estate IRA is that it lets you buy turnkey real estate properties with your retirement savings. You don’t have to tap your family’s emergency account, go further into debt or raid a college savings fund to pay for a real estate investment. When using a self-directed IRA for real estate, you can avoid hefty distribution taxes and watch your retirement account safely grow. According to a recent real estate article by U.S. News & World Report, the values of homes are rising. Real estate investors across the country are getting higher market rent as the demand for rental property calls for higher rents. With turnkey properties, you can either keep them as rental properties using a property manager to oversee the day-to-day responsibilities, you can “flip” the property to make a quick profit for your your real estate IRA or you can even take back a note for the property and profit from the sale and the interest on the note.
- Having a tangible asset
Another real estate IRA article by U.S. News about the benefits of using IRAs for real estate points out that many investors like the fact that real estate is a tangible asset you can feel and see. Real estate just doesn’t seem as unusual to some people as other alternative investments. A piece on alternative investments by CNN Money lists some of the crazier alternative investments as dressage horses, dairy cows, vodka distilleries, collectible guns, ostriches and beauty schools. Real estate is a lot easier to understand compared to exotic investments as well as conventional investments like futures, hedge funds and derivatives contracts.
- Enjoying the simplicity
It’s nice to buy a real estate property without having to go through the long lending process. Another advantage of a real estate IRA is you can move on a real estate purchase without waiting for financing to go through. An IRA LLC format gives you checkbook control so you don’t lose out on an all-cash bid. If you haven’t done it already, you simply roll money from a traditional IRA, Roth IRA, 401(k) or other eligible retirement account into a self-directed IRA. Although you are free to invest in different alternative investments, turnkey real estate or rental properties that are ready for tenants are extremely appealing.
- Avoiding a stock market crash
Six years into a bull stock market, it’s clear the stocks won’t continue to go up indefinitely. Although the stock market might correct rather than crash, a lot of baby boomers can’t afford to see their retirement portfolio completely ravaged. While stocks are up, some investors believe it’s a good time to take the profits and shift them into real estate.
- Taking back your free time
Some people don’t want to work as landlords because they have trouble playing the tough guy. When you buy turnkey real estate you don’t have to worry about your abilities to maintain a property, enforce a lease or fix anything because maintenance will be covered when you hire a property management company and contractors to do the work on your real estate property. Your only job is to buy real estate in your IRA and receive passive income. For people who are trying to maintain their day jobs, it’s nice to relax with a turnkey real estate property handled by other professionals. With a truly self-directed IRA, you just write the checks.
At New Standard IRA, we provide security, flexibility and simplicity for our clients who want checkbook control to invest in real estate and other alterative investments other than traditional stocks and bonds. Whether you prefer turnkey properties, foreclosures, short sales or traditional real estate sales, we can help you set up a real estate IRA. Never before have investors had as much freedom and flexibility to invest their money how they see fit. For more information on how we can help, please contact us.