There is a growing trend in the real estate business, and it is one that can not only be beneficial to the real estate investor, but also to those working in the profession. This trend is using a self-directed IRA to fund real estate purchases. Now, why haven’t many people heard of this? The reason is that there are only a few custodians in the nation that will administer a real estate transaction involving IRA funds. Entrust is one of these few custodians, and the only one with local offices nationwide.
The main benefit of using IRA funds to purchase real estate from an investor’s perspective is tax savings. All earning from the transaction grow in the retirement account tax free. Also, individuals can receive tax deductions for contributions made to an IRA. The exception to being able to deduct one’s IRA contributions would come via the Roth IRA; however, the Roth has its own tax advantages. Specifically, all contributions made to a Roth IRA are taxed up front, thus never being taxed again, and therefore able to grow tax-free forever. Also, since the Roth has already been taxed when the contribution is made, there is no minimum required age to take distributions, thus allowing the compounding effects to take place for a longer period of time. If you study compounding, you will know that this is especially important when the account reaches higher balances.
In addition, it is notable to know that the investor can use many types of IRAs to invest in real estate. These include a Simple, SEP, Traditional, Roth, and Individual 401(k). There is also a variety of real estate investments that can be purchased with an IRA. This umbrella consists of single family and multi-unit homes, apartments, condominiums, improved or unimproved land, mortgages, foreign property investment, and trust deeds.
The second group of individuals that can benefit from real estate IRAs is real estate professionals. The primary gain for real estate professionals is that IRAs can open up a new source of funds for their clients to invest with. Among the best ways for real estate professionals to market to their clients is through publications, newsletters, and even blogs (Entrust can write an article catered to your specific business). An even more effective way is to have a representative from Entrust speak at a private seminar for your staff and clients.
Why may self-direction be right for you personally? You may want to invest in what you know best. Some people are tired of relying on such a volatile stock market for their only means of retirement investing. By investing in real estate, you can truly diversify your own retirement account.
With Entrust as the administrator of real estate IRA’s, it is easy and tax free! We have local offices all over the United States and would be glad to assist you or your clients with your own unique situations. Please feel free to contact us for more information on taking the next steps. Contact Entrust at 352-378-7833 (Gainesville) or 866-839-0429 toll free with any questions!
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