There are a number of obvious benefits to holding real estate within a Self-Directed IRA, sometimes also called a Self-Directed Real Estate IRA. But what about the little-known benefits? A recent post at American IRA highlighted some of the less-obvious benefits of holding real estate in a retirement account, which in turn highlights why an investor might choose a Self-Directed Real Estate IRA in the first place.
According to the post, one of the little-known benefits was the ability to borrow money within a Self-Directed Real Estate IRA. "The protections and regulations on retirement accounts sometimes have investors worried that they cannot always use leverage within a retirement account," the post wrote. "The good news, you can." That means investors can use leverage to invest in real estate with a retirement account, which in turn can help them expand their portfolio of real estate in a quick amount of time. This encourages those who do have a lot of startup money and reveals that it's possible to access more funds than one initially thought.
Another benefit, according to the post, was the ability to collect rental income tax-free. The IRS does set clear boundaries between the IRA and the individual, the post notes, which means that one cannot own a piece of real estate within a Self-Directed IRA and then rent to themselves. But when treating the investment like a retirement investment—as is the intention of a Self-Directed IRA—the rental income collected on this property then grows in the account tax-free.
"People realize that real estate is a good investment, but they do not often put two and two together when it comes to retirement investing," said Jim Hitt, CEO of American IRA. "Our goal with this post was to demonstrate that investors can use real estate for retirement investing—and not only that, they will have access to all sorts of little-known benefits they might not have considered. Owning real estate is great for one's wealth but owning real estate with tax advantages can have enormous benefits down the line."
For more information about the Self-Directed Real Estate IRA or holding real estate within a Self-Directed IRA, visit http://www.AmericanIRA.com or call 866-7500-IRA.
"About:
American IRA, LLC was established in 2004 by Jim Hitt, CEO in Asheville, NC.
The mission of American IRA is to provide the highest level of customer service in the self-directed retirement industry. Jim Hitt and his team have grown the company to over $400 million in assets under administration by educating the public that their Self-Directed IRA account can invest in a variety of assets such as real estate, private lending, limited liability companies, precious metals and much more.
As a Self-Directed IRA administrator, they are a neutral third party. They do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). They are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality profitability or reputability of any investment, individual or company. The term "they" refers to American IRA, located in Asheville and Charlotte, NC."
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