Real estate investment is slowly but surely becoming one of the more preferred areas of investment by folks who look forward to their retirements. According to statistics, only 2% of all retirement funds in the United States are invested in real estate. However, this situation is changing as the self-directed IRA retirement plan is becoming more and more popular. With a self-directed IRA account, you have the ability to directly invest in pretty much any non-conventional assets beyond stocks, bonds and mutual funds. There is a far greater amount of flexibility in this retirement plan with plenty more to choose from than the traditional 401(k) or the simple IRA.
The owner of a self-directed IRA account has the authority to make their own investment decisions and not depend on decisions made by the financial institution. Before making an investment using a self-directed IRA, you should first choose a qualified trustee or custodian to hold your account. The job of this person would be to provide administrative services, like maintaining records and exchanging paperwork with the IRS. They will also let you know if there are any limits that apply to your account.
As mentioned above, if you are the owner of a self-directed IRA account, you can choose what asset types your money should be used to invest in. Your investment options will not be limited to traditional asset types like stocks, bonds and mutual funds. So if you think you have some knowledge about the current real estate market, you can use it to your advantage and take your pick from multi-unit homes, condominiums, apartment buildings, or improved or unimproved land.
Another great advantage of the self-directed IRA retirement account is checkbook control. You can make purchases and conduct transactions as and when you please by writing checks on behalf of your self-directed IRA. The transactions will be conducted through the LLC that the IRA owns.
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What you should know about self-directed real estate investments
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