Another Good Reason to Buy Rentals in Your Real Estate IRA

With Bitcoin currently making some investors thrilled and others nervous—not to mention a bull market that seems to have no end in sight—it seems the perfect time to diversify one’s portfolio with a Real Estate IRA. The consistent growth and income that can yield from a well-placed investment in real estate is an undeniable tool for building wealth, especially when held in a tax-protected account. Recently, USA Today pointed to a marked growth in the demand for rental properties that could suggest this is the ideal time to focus on real estate as a retirement investment strategy. Here’s why.

Single-Family Rentals: A Reason to Think About the Real Estate IRA?

According to the article in USA Today, single family rentals have seen an uptick in demand, developing “faster than any other portion of the market.” This is even outpacing single family home purchases, which points to a generational change in the way millennials think about housing. With renting becoming more and more the norm, it’s possible that now is an ideal time to enter the market by funding a real estate purchase through a Real Estate IRA.

Within the last three years, the article notes, single family rentals have gone up some 30%. That points to an increased demand worth noticing, especially as investors look for returns out of the stock market. Diversification is the name of the game here, and if there are solid returns to be had that can help a retirement investor increase the breadth of their portfolio, it’s always worth consideration.

Markets Skittish After the Housing Bubble?

The collapse of the housing bubble in 2007-2008 saw many people change their perception of real estate. The old idea used to be that even purchasing one’s own home was an investment. And that sentiment still exists. But the article in USA Today pointed to a change in perception—that perhaps securing a stable source of housing is the ultimate goal, not necessarily home ownership.

This can be an advantage to anyone who does believe that real estate is a great way to invest, because it means there is plenty of demand for rentals on single family homes. With single-family rental homes making up some 35% of the millions of rental units across the country, according to USA Today, that means there are plenty of opportunities for Real Estate IRA investors to consider.

What Every Real Estate IRA Investor Should Know

While this kind of demand is a major positive for anyone who wants to build wealth for retirement and believes in real estate as a vehicle to accomplish that, there are certain rules and regulations that every investor should know. First and foremost is the separation of a Real Estate IRA—and the real estate it holds—from the personal life of the investor. For example, an investor cannot rent from themselves, living in the real estate they hold through the IRA.

It’s important that investors know to treat these single family rental homes as separate entities, just as they would view a stock holding. Having a property manager handle much of it is a great step forward in achieving that goal. These and other rules are easy to follow—but it requires foreknowledge to ensure that they’re all met.

When done the proper way, owning a single family rental unit can be a tremendous boon to an investor’s bottom line. But it’s important to know all the facts as well. Continue reading up on Real Estate IRAs here, or call 866-7500-IRA for more information.