The housing market has been notoriously hot for years now. And from the perspective of an established investor with lots of real estate property, this isn’t a bad thing. In fact, Self-Directed IRA investors with lots of real estate property within an IRA portfolio have been doing quite well. But what about investors who are just beginning their real estate investing journey and want to do so within a Self-Directed IRA?
According to a recent post at Lifehacker, “the prices of homes in certain United States cities begun to fall—or at least level off.” With inflation rising—and interest rates going up with them—it makes it more difficult for home buyers to secure a mortgage. This, in turn, could lower the demand for housing in the short-term, which can lower prices. This signals “a cooling in the recently red-hot housing market,” says Lifehacker.
Lifehacker noted recent news from Redfin, which stated that over 40% of home sellers are dropping prices in Salt Lake City, Boise, Sacramento, and other real estate “hot spots” from the pandemic days. In other words, Self-Directed IRA investors who want to begin a career of real estate investing may finally be seeing the favorable housing prices that make it possible to “buy low.” Of course, American IRA as a Self-Directed IRA administration firm doesn’t offer specific investment advice. But one thing we can do is keep tabs on what’s happening in the housing market.
The Concept of “Location, Location, Location” and the Self-Directed IRA
Why point out these specific areas in which real estate prices appear to be dropping? One thing is clear: the Self-Directed IRA makes it possible for retirement investors to consider such things. While many people might be familiar with the concept of retirement investing from the perspective of stocks and bonds, there is the possibility of investing in real estate through an IRA. Investors who do so can often look at specific locations for their investments. This, in turn, leads real estate investment junkies to consider the possibility of using a Self-Directed IRA for the obvious tax benefits and protections.
Location might matter less to real estate retirement investors, after all, who are prohibited from transacting with disqualified persons—that is, people they already know, such as a sibling or a spouse. Self-Directed IRA investors can invest in a wide range of assets in the United States. After all, there’s no rule saying that any retirement investor has to buy stocks only from companies in the same headquarters as the investor’s own state.
Keeping tabs on the patterns in locations like Salt Lake City, Boise, and Sacramento doesn’t only provide regional context, but helps highlight what’s going on with real estate prices across the country.
Is Now the Time to Get Started with a Self-Directed IRA?
A Self-Directed IRA is a powerful investment vehicle. But it is no guarantee that your investments will suddenly become successful. Instead, it is a way to maximize the value you get from your investments—thanks to the possibility of enjoying tax protections on assets like real estate. For investors who already know a lot about real estate, an IRA can be a great vehicle for maximizing these gains.
However, it’s important that every investor understand their own limitations, do their own research, and make their own decisions. Interested in learning more about Self-Directed IRAs? Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation. Download our free guides or visit us online at www.AmericanIRA.com.