Today I would like to share with you another investment tool used in real estate. This tool is called a Self-Directed IRA. We will only cover a few basics about what is a SDIRA, and how you can accelerate your investment career using it. A self-directed IRA is an individual retirement account that gives the IRA owner greater control over their investment decisions. Simply put, a self-directed IRA allows you to use your retirement fund to invest in nontraditional investments, like real estate, trust or mortgage deeds, private placements, tax liens and so on. This allows you to compound your assets quickly with investments you select. The profits made from your real estate investments are tax-free, as long as those investments are held by your self-directed IRA.
The first thing you need to do is find a custodian, preferably a bank or trust company, which accepts real estate in a self directed IRA or real estate IRA. Once you have selected one, set up a self-directed IRA with your IRA custodian. You then finance the self-directed IRA account with funds, or transfer money from either a previously held retirement account or one that an employer is currently funding.
One great vehicle that can accelerate the value of your IRA would be Income Producing Property. If the property generates any income through sell, rental or lease of the property, the income must flow back into the IRA. This is because the purpose of your IRA is to provide for your retirement in the future, not to benefit you now. Using a Real Estate IRA to purchase real estate is one of the best ways to add to your portfolio and save for your future. With cash-flow and appreciation, real estate has a potential higher rate of return than stocks and mutual funds. Also the profits you make from these investments have huge tax benefits. Another great benefit is that the property or properties can be sold at any time to an unrelated party and the proceeds from selling an IRA-owned property roll back into the IRA without facing capital-gains taxes. You can then invest the proceeds in another property or any other asset within your IRA.
Given the uncertainty in today’s mainstream investments, real estate is gaining a great deal of interest as an investment option. Whether your investment strategy is to buy & hold, or buy & sell for gain, real estate investing through your IRA can yield unbelievable profits towards your retirement.
Friday, January 13, 2012
Thursday, January 12, 2012
Should I Invest In Real Estate In Todays' Market?
While the timing may be right, there are several common questions that can help first-time investors take advantage of what might be the opportunity of a lifetime.
1. Is this a good time to invest in real estate?
2. What’s the best strategy for this market?
3. How can I protect myself in this economy?
When the money is cheap to borrow and the houses are cheap to buy, it's a great time to invest in real estate. While the timing may be right, first time investors should partner with experience. If you find an experienced real estate agent / investor who would be willing to work with you in exchange for the capital you can provide, this will give you the opportunity to acquire investment knowledge and experience firsthand. Not only will they help you locate promising properties, the agent will be very careful with what they recommend and expect to do business with you again in the future.
Everyone want to know the best strategy for the market or how to make the most money with the least amount of time and effort. This depends on many factors such as are you looking to build a long-term wealth portfolio? Do you have money to put into the deal? Do you have credit? Or are you looking to generate quick cash? If you are looking to buy property in hopes of renting it out, location is always key. Homes with multiple bedrooms and bathrooms in highly populated areas are ideal neighborhoods. Renters gravitate to good school districts in safe neighborhoods. The more you have to offer in amenities, the more likely you are to please potential renters and buyers if you ever choose to sell.
A good way to protect yourself when investing is to lay aside your emotions! Sorry, but investing in real estate involves risk. In order to minimize your risk, you always need to evaluate deals carefully and look at the long-term picture. There’s a clear, but big difference between taking a risk on a well-researched investment and being tricked into losing your money. Know your source! If you take the time to find a good adviser who is right for you, you are much more likely to make good investment decisions. Don’t buy an investment that you don’t understand. Your chances of losing money are greater. The bottom line is that you need to get educated, evaluate deals objectively, and proceed with healthy caution. Happy Investing!
1. Is this a good time to invest in real estate?
2. What’s the best strategy for this market?
3. How can I protect myself in this economy?
When the money is cheap to borrow and the houses are cheap to buy, it's a great time to invest in real estate. While the timing may be right, first time investors should partner with experience. If you find an experienced real estate agent / investor who would be willing to work with you in exchange for the capital you can provide, this will give you the opportunity to acquire investment knowledge and experience firsthand. Not only will they help you locate promising properties, the agent will be very careful with what they recommend and expect to do business with you again in the future.
Everyone want to know the best strategy for the market or how to make the most money with the least amount of time and effort. This depends on many factors such as are you looking to build a long-term wealth portfolio? Do you have money to put into the deal? Do you have credit? Or are you looking to generate quick cash? If you are looking to buy property in hopes of renting it out, location is always key. Homes with multiple bedrooms and bathrooms in highly populated areas are ideal neighborhoods. Renters gravitate to good school districts in safe neighborhoods. The more you have to offer in amenities, the more likely you are to please potential renters and buyers if you ever choose to sell.
A good way to protect yourself when investing is to lay aside your emotions! Sorry, but investing in real estate involves risk. In order to minimize your risk, you always need to evaluate deals carefully and look at the long-term picture. There’s a clear, but big difference between taking a risk on a well-researched investment and being tricked into losing your money. Know your source! If you take the time to find a good adviser who is right for you, you are much more likely to make good investment decisions. Don’t buy an investment that you don’t understand. Your chances of losing money are greater. The bottom line is that you need to get educated, evaluate deals objectively, and proceed with healthy caution. Happy Investing!
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