Are You the Type of Investor Who Fits a Real Estate IRA?

Posted on March 9, 2016 by

Most of us have the same financial goals. We want to take care of our families. We want to take care of ourselves. We want to work towards retirement with confidence that our decisions are the right ones, and we want to see our wealth grow. We want to retire with plenty of money left over for a comfortable lifestyle, happy and peaceful knowing that we’ve done enough to take care of ourselves should disaster strike. So what does this all have to do with a Real Estate IRA?

A Real Estate IRA is one tool you might have for getting to that goal. Although many of us share the same goals, the strategies which we employ to achieve those goals can vary. And for some people, a Self-Directed IRA invested in precious metals might be one way to get there. For other people, a Real Estate IRA might be more suited to their knowledge and experience.

How do you know if you’re the kind of person for whom a Real Estate IRA might work out? We thought you’d never ask.

Common Questions about Handling a Real Estate IRA

One of the best ways to examine whether or not you might be the type of investor who can get the most out of retirement investing in real estate is to look at a few of the common questions when it comes to retirement strategies:

  • How is your tolerance to risk? (The younger you are, generally, the higher your tolerance to risk should be. The older you are, the more you’ll want to protect the assets you’ve already built up.)
  • Are you okay with utilizing leverage to expanding the possibilities of your investments, or are you more interested in a “savings plan” style of retirement investing?
  • Do you believe in the value of real estate long-term, or do you view it more as a speculative kind of investment?

The answers you had for the above should be obvious: if you have a higher tolerance to risk, if you like utilizing leverage to expand your flexibility, and if you believe in real estate as a long-term source of wealth, then there’s a good chance that real estate investing through a Self-Directed IRA is a viable option for you.

If You’re Too Averse to Real Estate Risk

Like all investments, real estate comes with certain risks. There’s no guarantee that the price you paid for what you buy will be the same as it is tomorrow. Many of us know this—in fact, the very idea of investing is that you’ll generally be able to predict the future well enough that you can turn a profit.

But if you’re too averse to the kind of risk that comes with utilizing leverage in your retirement portfolio, consider this: you can utilize an IRA with non-recourse loans; in fact, it’s a requirement. That means that if you default on a real estate loan in your Real Estate IRA, the lender can’t come after you for your other assets. This isn’t an ideal scenario, granted, but it provides a buffer between your real estate investments and your portfolio at large. People with smaller tolerance for risk find that this is one advantage that helps turn them on to the idea of real estate investing…but only if it’s done properly.

To learn more about how real estate investing for retirement works, call us at 1-866-7500-IRA(472) or continue browsing AmericanIRA.com. Here you’ll learn all about different types of investment options available to you when you direct your own IRA.

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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