Real Estate IRA Investment Basics
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By :
Jerry Glynn
Submitted
2008-07-25 12:16:41 |
A real estate IRA is a type of self directed IRA. A self directed IRA is an investment option for those who want to have more control over their retirement investments.
Unlike traditional IRAs these type of investments allow you to diversify your portfolio, by using your retirement funds to invest in loans, businesses, real estate, and other opportunities.
IRAs were created in 1975, as part of the Employee Income Security Act of 1974, or ERISA, and self directed IRAs were also created during this time. Most investment choices during this time included real estate and notes. Technically, self directed IRAs are no different from traditional IRAs.
They differ in their investment options, since most traditional IRAs only permit investment options in approved stocks, mutual funds, bonds, and CDs. This type of IRA allows, in addition to the investment types mentioned above, for tax lien certificates and private placements.
There are several different options for real estate IRA investing depending on how the real estate investment is acquired.
If you have purchased it from an unrelated party paid cash for it, and plan to not use it for personal reasons while it is part of your IRA, then normal rules and restrictions, which vary by lender, state, and circumstance, apply.
You can use your IRA to purchase commercial property, residential or rental property, loan extensions, partial notes, tax liens certificates, and undeveloped land. Other common advantages include reduction of taxable income, asset protection, estate planning, and possible tax deferment.
One of the popular features of this kind of IRA, in any case, is the limited custodial participation and reduced custodial fees. This means that self directed IRA holder does not have to pay additional special, asset based, holding, or other related types of fees, including transactional fees for each check from your investment that you draw.
If you are interested in pursuing this IRA type, you should be sure to learn and adhere to the rules and regulations that govern the management of these types of accounts. There are certain steps that you must follow in order to insure that your IRA will be official and that you will be able to qualify for the associated benefits and deductions.
It is crucial that you define your investment before you take any other action towards a self directed real estate IRA or traditional IRA. Your financial advisor can assist you in making sound investment decisions and should be consulted before you agree to any investment type.
Your retirement fund is vital to your future, which is why you should always research your options when it comes to investing it. Researching and learning about a particular topic is the first step to a successful start. |
Author Resource:-
For more information about sef directed and real estate IRA visit our site
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