Using Your IRA Funds to Buy Real Estate

 

by Annette Cooper

Everyone interested in real estate investing should know that you can use IRA retirement funds to purchase real estate as well as stocks, bonds and other typical liquid assets. Below you will find links to companies specializing in self directed IRA investments, specifically set up to buy and sell real estate.

They are many compelling factors that make IRA real estate investing a powerful investment tool, and several limitations that require prudent consideration before you invest. As always, you must understand the risk and reward potential.

For Instance, most lenders will not loan money to a retirement account. Holding property inside an IRA does not allow you to take advantage of the traditional tax benefits of owning real estate. No property tax, mortgage interest deduction, or depreciation is allowed.

Also, when you sell your investment; any IRA profit is treated as ordinary income and not subject to capital gains. Within a ROTH IRA, the profit is considered tax free.

In addition; your IRA must have funds available to absorb the expenses of owning property such as taxes, maintenance, and repairs or management fees. All expenses must be paid out of the account.

Nevertheless, harnessing the exponential growth potential of investing in real estate for your portfolio should be given careful consideration. More than 90% of self made millionaires have done it through real estate. The expansive opportunity to invest in real estate partnerships gives an added opportunity to create a leveraged investment strategy not available with the typical IRA Investments.

Don’t hesitate to call me if you want to discuss the pros and cons of the using IRA funds to buy Real Estate. The financial rewards can be substantial.

 

Copyright: Annette Cooper