By J.P. Dahdah, Founder & CEO of Vantage
Have you accumulated money that you want to invest for the long term? Are you currently weighing your options to maximize your gains? Are you planning for your retirement and want more control and a better return on investment?
In this blog post, we’ll show you three reasons why you should consider investing in real estate in your Self-Directed IRA, thanks to the huge growth potential that real estate investing provides.
1. See What the Numbers Say. Even with the downturn over the past several years, the Nasdaq has climbed overall in the past decade, while the S&P 500 has appreciated during the same time period. Well, wouldn’t it be great if you could grow even faster than the stock market? And by that we mean, much faster. For instance, consider the FTSE NAREIT composite (a real estate index), which has grown exponentially more than the Nasdaq over the past decade. Real estate investment for the long term makes a whole lot of sense.
2. Tax Benefits to Real Estate Investing in Your IRA. Investment income of any kind will attract taxes. But when you use your IRA to purchase property and generate revenue, you can avoid paying taxes on this income and any capital gains until you actually withdraw anything for your retirement income (or avoid taxes on the income altogether in the case of Roth IRAs, in which case your contributions are taxable). This could turn out to be an added advantage depending on your tax bracket when retiring.
3. All Income of the Property and Expenses Have to Be Facilitated by the Custodian/Administrator of Your IRA. While this limits the use of the property, it acts as a check on your actions, which reduces the chances of you making a mistake and increases the chances of the property being used in your best interest. Besides, the custodian maintains the necessary records, educates you on the workings of the IRA, and also takes care of IRS reporting during the lifetime of the IRA. These are a lot of headaches that you don’t need to worry about.
So investing in real estate with your Self-Directed IRA not only maximizes your long-term returns, but also provides tax advantages, while at the same time helping maintain the asset and take care of the required IRS reporting and recordkeeping for your retirement account.
What other techniques have you discovered to safely generate good returns over the long term?
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or Info@VantageIRAs.com.