Dispelling Common Objections to Real Estate IRAs

Posted on January 12, 2016 by

When it comes to investing, there’s a lot of information out there—and a lot of misinformation as well. Being able to tell which is which is one of the keys to educating yourself as an investor and keeping your retirement investments secure, safe, and stable over the long haul. That’s why we love to dispel some of the common myths and objections when it comes to Self-Directed IRAs—and today, we’re tackling Real Estate IRAs.

Are we saying that all objections or questions about Real Estate IRAs—or Self-Directed IRAs in general—are meritless and without value? Of course not. But by the time you’re finished reading this article, you should have a solid grasp of which objections you might want to consider…and which ones really aren’t objections at all:

Common Objection #1: Real Estate IRAs Leave You Little to Invest With!

The idea of contributing, say, $100 per month to an IRA is easy when you’re investing in stocks and mutual funds. When you’re investing in real estate, many people understandably wonder how a similar strategy might work when it comes to Real Estate IRAs. 

The truth is, you can use leverage in a Real Estate IRA as long as you use non-recourse loans. These types of loans help protect your overall portfolio, because it means that a lender can only come after the asset in question—not the rest of your money. But the point here? The fact that you can utilize leverage to invest in real estate, even from within a Real Estate IRA.

Common Objection #2: But Real Estate Isn’t Stable!

What investment is? Even the stock market, one of the most consistent-performing investment vehicles out there, can be difficult if you don’t know how to manage it. You have to make sure that your assets are diversified, you have to make sure that you don’t sell everything just because of one or two bad years, and you have to ride out any potential economic crisis with an eye on long-term gains. Is it really so different from the real estate market, where you place an eye on long-term value…with the possibility of collecting rent for short-term income? In some cases, real estate can be just the kind of stability people need to secure for themselves a retirement income.

Common Objection #3: Real Estate is Hard to Manage

True: if you’re acting as landlord and property manager, you’re going to have a heck of a time handling everything. But when it comes to Real Estate IRAs, you’ll hire a property manager to handle the basics. They’ll see to the maintenance of the property and to dealing with tenants so you don’t have to—in many ways, this makes real estate investments much like any other type of investment, wherein you simply have to sit tight and hope for it to grow over time.

Common Objection #4: Most People Don’t Know Real Estate Well Enough to Invest

A valid objection, but should it be prohibitive? Consider how little most investors truly understand about the stock market…yet still understand that if they make the right decisions, they can stand to benefit from having their money in the market after a long period. Real estate doesn’t have to be very different.

If you’re looking for alternative investment vehicles to round out your retirement portfolio, now might be the time to consider Real Estate IRAs. Call us at 1-866-7500-IRA(472) to learn more about Self-Directed IRAs or simply keep visiting AmericanIRA.com to learn more and see if you can’t dispel a few other myths about retirement investing.

Jim HittJim Hitt is the Chief Executive Officer of American IRA and he has been committed to all aspects of investing for more than 30 years, using self-directed IRAs for his own investments since 1982. Jim’s forte is the financing and acquisition of real estate, private offerings, mortgage lending, business’s, joint ventures, partnerships and limited liability companies using creative techniques.

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