If you have an IRA that you’re using to invest money for your retirement, you’ve likely been thinking about using your IRA money in real estate.
Most people who have had an IRA for several years have been thinking about investing their IRA money in real estate because it doesn’t matter if they are a casual or Institutional Investor, it’s hard not to have seen the rapid appreciation of real estate and the increase in rents nationwide.
Since our country has turned into a nation of renters, it makes sense for investors to hold at least some real estate in their investment portfolios.
Owning rental properties brings economic stability because people always need a place to live and there’s nothing better for an investor to own an asset that’s always in demand.
How To Use Your IRA Money In Real Estate
Even though you may have had an IRA account for a number of yours, if your goal is to invest some of the money from your IRA into real estate, you have to convert your Roth IRA into a Self-Directed IRA.
Converting your IRA into a Self-Directed IRA is important because this will also give you the ability to invest in real estate, tax lien certificates, mortgage notes, precious metals, private placements and more!
Before you use the money from your IRA to purchase real estate, you need to know that you have to work with a custodian who will provide you with guidance when it comes to understanding the IRS tax code.
Regulations That You Need To Know
When you find a multi-family property the interested in investing in, the first thing that you need to know is that the property that you buy will not be owned by you, it will be owned by your Self-Directed IRA.
IRS regulations also state that you can’t use the money from your IRA to purchase a property that you already own and you cannot use the property personally.
This means that if you purchase a multifamily property, you cannot use it personally or allow your spouse, relatives or friends to stay there either.
Lots Of Benefits Of Owning Real Estate In An IRA
As somebody who has been following the real estate market already, you know that rents have appreciated dramatically over the last 10 years, along with property values, so there are huge practical benefits that come from owning real estate.
During times of global economic uncertainty, it makes sense to put more IRA Money In Real Estate into rental properties because rental properties are familiar, and they continue to generate consistent cash flow every month, helping investors build wealth during stock market fluctuations.
Before investing in multi-family rental properties, you need to make sure that you’re prepared to take the plunge and invest IRA money in your first rental property.
Due Diligence Is Necessary When Investing In Rental Properties
Keep in mind that rental properties are not an investment that you can easily liquidate like stocks, bonds or other investments.
If you’re not ready to purchase your first rental properties yet, you may want to consider getting your “feet wet’ in real estate by investing in rental properties through crowdfunding or a Real Estate Investment Trust
Once you’re ready to invest in rental properties, keep in mind that even though a particular city may look like a great place to invest in real estate, many cities have changed over the last 12 months and are not as safe and secure as they once were.
You should take the time to practice due diligence and research areas before you invest in them. This includes investigating the local economy and finding out what an area has to offer before you invest in real estate there.
After you find a great rental property that you’re interested in investing in, the next thing to do is to have the property thoroughly inspected and take the time to analyze the owner’s financials for the property so that you can verify that it will be a great deal for your self-directed IRA.
Should You Invest In Real Estate Before The End Of 2020?
With the incoming Biden Administration, most investors have speculated what the new Presidents administration is going to look like?
It’s highly likely that President Biden’s goals will be to change rules for Real Estate Investors who invest IRA Money In Real Estate in the coming years so that he can raise money to cover Federal programs.
Biden has already proposed changes to 1031 Exchanges and Opportunity Zones, so we can rest assured that those changes are on the way, but the big question is when?
Although President Biden and his administration may be eager to increase taxes and eliminate Trump’s tax cuts, the reality is that Biden and his team are going to have to work hard to stop a foreclosure and eviction crisis from happening at the same time.
Besides stopping foreclosures and evictions, Biden is also going to have to work to get an economic stimulus bill passed as soon as possible which will inject badly-needed capital into the US economy.
With all these issues on Biden’s economic agenda, the reality is that it may be two years, or longer before he’s able to make any real changes to the tax code in the United States.
It doesn’t matter where you stand politically, your goal as an investor should be to do what’s best for your portfolio right now.
If you’re ready to invest IRA Money In Real Estate in rental properties, you shouldn’t hesitate to make your move before the tax code changes and you don’t have the same ability to take advantage of the regulations that Real Estate Investors have enjoyed over the last three and a half years under the Trump Administration.
Contact Trier Capital
At Trier Capital, we know that investing in multi-family rental properties can be a lot of work, especially if you don’t have the time or energy source, acquire and manage those properties yourself.
My company does all the hard work to source and acquire rental properties, and then oversee asset management after purchase, while our investors sit back, relax, and receive tax-advantaged passive cash flow.
To learn more about how we can help you get started with investing in multifamily properties, contact me today by calling (630) 229-2383 or click here to connect with me online.