Self-directed IRAs are some of the most flexible retirement accounts available. While traditional investments like stocks, bonds, and money market accounts may be discussed more often, diversifying your portfolio increases your opportunities for success. Tax lien investing is a great way to benefit from said flexibility, and it’s both a well-established and well-respected way to invest your hard-earned retirement dollars.
As we all know (especially this time of year), the government collects a great amount of taxes from citizens across the country; but did you know that they can also collect profits for you too? Tax liens serve this role, as local tax collectors gather the profits for your IRA.
A number of investors have benefitted from this unique opportunity and collected higher than normal interest rates as a result. In fact, if an owner doesn’t redeem their property, tax lien investing may put you first in line to receive the property after a foreclosure. Even if you don’t receive the property, interest rates can vary from 12%-50% (states set their own rate), which certainly outperforms many other asset types.
Of course, it’s always best to consult the experts. Talk to a realtor and/or appraiser to determine the property’s value before bidding on a lien and discuss the details with your attorney to make sure you’re following a given state’s laws and regulations. Finally, personally visit the property if possible, check market values, and always have an exit strategy.
If you have any questions about opening a new IRA account, contact us at 1-866-7500-IRA(472) or [email protected]. If you’d like to add tax lien investing to your existing portfolio, contact us at 1-866-7500-IRA(472) or [email protected] or click here for more information.