In Ten Reasons to Consider a Real Estate IRA, Part I, you learned about some of the most important ways you can start investing in real estate to maximize your returns and minimize your tax burdens. But those aren’t the only reasons to consider Real Estate IRAs. In this section, we’ll concentrate on some of the retirement considerations about investing this way, and think about the economy as a whole. Here are the remaining six reasons to consider a Self-Directed IRA in real estate:
Reason #5: Getting out of the stock market.
Not completely. We’re not saying that anyone has to get out of the stock market completely. Over time, the stock market is one of the best ways to guarantee yourself a return on investment—but that’s over time. In the short-term, the stock market is just as volatile as anything else. And if you’ve been paying attention to the news lately, you know that a volatile market is a scary thing to get involved in. Consider a Real Estate IRA as an option for “not putting all of your eggs in one basket.” A way not to “hedge,” but to diversify your holdings and ensure that when you need to retire, your wealth will be there.
Reason #6: Strategies like partnering.
If you want to have a hand in large pieces of real estate but have limited funds yourself, you can partner with yourself and others when acquiring a new asset. This is one of the most powerful ways to ensure that your Real Estate IRA is in good hands—if you partner with the right people. We recommend using caution when using a strategy like partnering, as it’s usually a good idea to have experience in this area and partner with people you trust.
Reason #7: Generating an income late in life.
If you have a lot of money but no income, a Real Estate IRA may just be the best way to “get in” to an IRA and ensure that you have an income later in life. For many people, real estate is one of the best ways to build that kind of income so that you can retire on it. That’s not to say that it’s necessarily going to be easy, but for many people investing in real estate is far and away the best way to ensure that they’re going to be able to live off of a regular income without having to work.
Reason #8: Building long-term wealth.
Real estate might fluctuate like any other market, but there’s one thing investors love about real estate: it’s not going anywhere. Real estate like land is scarce; there’s only so much of it. Some people use this logic and suggest that real estate has nowhere to go but up over the long term. We’re not going to promise that this is the case, but we are going to point out that real estate can be a valuable way to build long-term wealth even if you’re young.
Reason #9: Passive wealth growth.
With a Real Estate IRA, many people figure that they’ll be fixing sinks and washing carpets because of the nature of owning property. But when you work through property managers—as you will in a Real Estate IRA—all of that work is already taken care of.
Reason #10: Opening your mind to new possibilities.
If knowledge is power, then when it comes to investing, knowledge is valuable indeed. That’s why it’s important to at least consider a Real Estate IRA! If you have any questions, continue to browse AmericanIRA.com or give us a ring at 828-257-4949. We’ll be glad to talk to you about Self-Directed IRAs.