It may be a wonderful time to invest in rental properties! For employees that have a long history with a company and were recently unemployed. You have the most flexibility when it comes to investing. You have several options with your 401k:
• Leave your money in the current corporate 401k Plan.
• Take your 401k money out and rollover into your own Rollover IRA plan with another Financial institution.
• Take you money and rollover into a Self Directed IRA to purchase real estate.
So, what is a Self Directed IRA?
A Self Directed IRA enables investors to purchase and hold unique investments within their account. This is not like your traditional IRAs where you own mutual funds, stocks and bonds. With a Self Directed IRA, it provides a much broader selection of investments. For example, you might use funds within a Self Directed IRA to purchase:
• Real estate – buy investment property.
• Undeveloped or raw land.
• Promissory notes.
• Tax lien certificates.
• Mineral rights, oil and gas.
• LLC membership interest.
• Livestock.
• Gold, silver and other precious metals.
• Cryptocurrency.
• Water rights.
For this blog and discussion, I will focus on Southwest, Florida Real Estate investments in Gulf Coast rental properties. Most financial investment companies, accountants and personal investors do not fully understand that you can purchase real estate investment properties within a Self Directed IRA account. Yes, you can, but it is not for everyone.
So, why would you want to buy real estate in a new retirement account? Here are 3 reasons:
- You want to diversify you investments options between stocks, bonds and now real estate.
- You have a passion for real estate, understand investment rental properties and looking forward to working with a property manager.
- Opportunity for tax free annual rental income and your property investment may increase in equity each year.
All gains from your real estate investment are tax free as long they are held within a Self Directed IRA and you do not touch the money. To own real estate inside your IRA, you must have a “self-directed” IRA so that your investment choices are not limited to certain asset classes. Midland Trust Company is a perfect choice with a long history of reasonable fees and excellent service.
I am a client with Midland Trust Company and they have done a great job a custodian my real estate investment and ensuring my checks for maintenance, insurance and taxes go out on time Great company!
For employees that have over 15 years invested in a corporate 401k, you may want to learn more about Self-Directed IRA and invest in rental properties. See if you like the idea of owning rental properties managed within a Self Directed IRA. What is your risk tolerance? Can you buy a real estate investment for a great price?
Please remember I am not an investment strategist or licensed financial advisor. I simply love real estate and found a great way to add it to my investment strategy. It is not for everyone! I wish you good luck in your investment choices!
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