Real estate investors can apply their knowledge in areas they are already successful (and comfortable) to their IRAs and other retirement plans. When you combine the advantages of an IRA with a real estate investment, you have the ability to grow investments tax-free or tax-deferred. The rate of return for real estate in your IRA, will be based on your knowledge and expertise in this area, not on the ups and downs of the stock market.
Unfortunately, most investors believe that their only IRA investment options are bank CDs or the stock market and mutual funds, not real estate. If you currently are a successful real estate investor, the combination of real estate and your IRA can be very powerful.
The advantages a real estate IRA offer Americans the following:
- The power of compound interest
- Reduction of taxable income
- Asset protection
- Estate planning
There are certain types of transactions that you can not perform through an IRA. Basically, the IRS prohibits “self dealing,” which are investments in which you or your family members of lineal descent have prior ownership. Additionally, no investment (aside from FDIC-insured deposits) is guaranteed and real estate investing is not for everyone.
Equity Trust Compay can give you a wealth of self-directed IRA information and resources. Please visit their website at http://www.trustetc.com/real-estate-ira/real-estate-ira.html to learn more.
Please be sure to consult your tax professional and investment advisor for guidance.
