Rental Strategy Using a Self-Directed IRA

With the housing market showing signs of improvement, real estate IRAs are becoming an increasingly popular investment for building wealth for retirement. However, when investing in property with a self-directed IRA, a rental strategy makes the most sense in today’s current economy. Retirement advisers are recommending that investors look at the properties in their real estate IRA as a long-term investment.

Before the real estate bubble burst, property flipping – buying homes to renovate for quick resale – was a popular way to use property for building wealth. However, given that current real estate prices remain relatively low and the once red-hot market is cooler, leveraging a rental strategy is a smarter plan these days. Investors can use their self-directed IRA to purchase a wide variety of property types, including apartment buildings, duplexes, and office buildings. Rather than attempting to resell them for a profit in the short term, savvy investors add the assets to their real estate IRAs with the intention of keeping them. Renting or leasing the space provides a steady stream of income into the real estate IRA. Many individuals who are ready to get back into the real estate market are opting for a rental strategy. An IRA, after all, is intended to build wealth over the long-term, so it is appropriate to take a long view of investments.

One of the reasons why the rental strategy has gained traction among real estate IRA owners is because it allows them to take advantage of today’s economy while also planning for the future. Since real estate prices are currently low, it is wise to buy and hold while collecting monthly rents. As prices rebound over the next 10 to 20 years, those individuals who bought low will be in an excellent position to sell the property for a substantial profit. The profits from the inevitable long term real estate appreciation combined with the regular rental income over the time the property was held can add up to significant retirement savings accumulated in the self directed IRA account. For individuals who wish to learn more about investing in real estate with a self-directed IRA or implementing a rental strategy, CamaPlan offers a series of investor education courses and webinars through our Academy. Check it out today!