IRA Financial Group: Real Estate Investment with a Self-Directed IRA
What does it mean by self-directed IRA? Self-directed IRA refers to alternative types of investments that are IRA custodian approved and accepted, a financial institution that responsible for IRS reporting requirements and keeping records. Potential tax benefits is perhaps the greatest benefit of using a self-directed IRA when purchasing a real estate. You can benefit from tax-deferral of your income until the day you take withdrawals, or if your investment holdings are in a Roth IRA. For those active investors, they may still engage in buying, selling, and flipping properties, moving funds from one project to another, and still maintaining their IRA’s tax-deferral status.
You may not realize that you can invest your retirement in real estate, and you can purchase a property without the tax benefits of a 401k or IRA. You can invest on a real estate using your self-directed IRA, gaining several advantages such as delayed taxes on investment gains, leverage growth, protection against market volatility and inflation, tax-free growth through a Roth IRA, rental income, and a chance to pay your retirement house. Whenever you invest in real estate within your retirement plan, or sell a property and keep the money on your retirement account, your self-directed IRA delays your taxes, helping you earn higher an after-tax-return for your real estate portfolio. Gains from traditional IRA are taxable so it is best to invest in a large scale real estate investment through Roth IRA, wherein investment earnings are tax-free when withdrawing after the age 59 1/2 . When it comes to purchasing a real estate property under your IRA, the title will not be directly under your name but your IRA, thus offering a good financial protection in case of a defaulted loan, wherein the lender can seize your property but not your other assets and not affecting your own personal credit score.
When compared to the stock market, there is lesser stress and risks associated with real estate investments, so it is best to invest your retirement plan to real estate properties as they value tend to rise over time. You can pay off your mortgage and your other investment property expenses with rental income, and any additional income stays in your IRA where it will grow tax-deferred and used for your future investments. With the help of your IRA, it is now possible to purchase your dream home. When you are ready to retire, you can just withdraw the title from your IRA, and then move into your retirement home. Find out more about self-directed IRA options by visiting our website or homepage now.