From the NY Times:
THE past couple of years have left many people staring in disbelief at the returns on their individual retirement accounts. Consider last year, when the Standard & Poor’s 500-stock index finished the year essentially where it started.
So it makes sense that people are looking for ways to earn more for retirement — or to make up for losses. Yet when I heard that an increasing number of people were moving money from traditional I.R.A.’s to self-directed I.R.A.’s that focused on real estate, I was skeptical that this was a good idea.
First, I wondered, how could this be done with retirement money? Was it even legal? And were people who had worked and saved money for their retirement really putting it into real estate so soon after the bubble burst?
Could you really have a conservative investment in your IRA today that earns 6, 7, 8% or higher? That’s legal? Yes you can, here’s the secret that your Wall St. broker and banker don’t want you to know: You can open a Self-directed IRA. That is an IRA account set up with an independent Custodian who makes the investments you direct it to (clever name huh?) instead of steering you into the products that earn them the biggest commissions and bonuses.
Of course there are some limits on the kind of investments but we’re not looking to corner the market on Greek reverse CDO squared repos (whatever those are). We’re looking for good income, inflation protection and some upside potential with a conservative investment that we understand. Something real, that we can see and touch, that we can drive by and walk through. Something of good value, something that everyday people appreciate and use. A necessity you might say!
Now I’m not talking about being in the landlord business, I am talking about the apartment building investing business and one of the expenses we gladly pay is for professional property management to handle the three Ts: tenants, toilets and trash. Our job in owning apartment buildings is to manage the property manager… and collect the rewards.
Think taxes are going up in the future? Consider a Self-directed Roth IRA. Put after-tax dollars in now and pull the returns out tax free, no matter how big they are. To put apartment building investments to work for your retirement income contact us.
For more dos and don’t with Self-directed IRAs read the whole NY Times article: Tackling Real Estate in a Do-It-Yourself Approach to I.R.A.’s
One thought on “The secret to owning income producing apartment building investments in your IRA.”
Another good article on self-directed IRAs in the Wall Street Journal : http://on.wsj.com/IAIDMi
Hat tip: Teresa G.