By J.P. Dahdah, Founder & CEO of Vantage
Who else wants to kick start their retirement portfolio and see meaningful returns?
With real estate prices at very attractive levels, it’s time to super-size your retirement portfolio by earning maximum profits through the real estate market.
In this post, we will touch on the process of investing your retirement portfolio in real estate so that you can broaden your investment approach and provide for a secure retirement.
Real estate provides a robust combination of value appreciation and income, which has historically been an attraction for investors who understand the benefits of real estate investing. Investors can own real estate of any kind within an IRA, including single family homes, raw land, international properties and commercial real estate investments.
If you’re considering investing in real estate through your Self-Directed IRA, here are some key strategies to consider…
Single Family Home Strategies
There are a number of real estate strategies that can super-charge your retirement portfolio. One of the most popular is a single family home strategy. Your IRA can borrow capital from a bank, on a non-recourse basis and use the home as collateral to enhance your investment returns. Most non-recourse IRA lenders require that the IRA place a 30-50% down payment for the property investment and typically charge a higher interest rate than the conventional loan financing programs available for non-IRA deals. The IRA receives the rental income which is used to cover the financing costs and payments of purchasing the property with a loan, while the property appreciates.
Commercial Real Estate
Similar to single-family home strategies, one of the main draws of commercial real estate is that it earns income. The difference is that commercial real estate values are typically based on current and future income streams from the property that is being evaluated. Don’t have enough money in your IRA to purchase the commercial property you are interested in? Don’t worry because Self-Directed IRAs may be used to purchase a fractional portion of the property, either by partnering with other investors directly on the deed or through the use of entities, such as limited liability companies or limited partnerships. This fact allows many investors to get involved in bigger deals they can’t do on their own or into more deals which helps add greater diversification.
There are many types of commercial real estate properties: for example, strip malls, office buildings, and industrial park projects. What’s important is that you demonstrate that the property can produce a profit.
Investing in real estate can super-size your retirement portfolio by maximizing your profits and producing attractive returns, using a combination of income and value appreciation.
For more information on how you can discover your IRA investing alternatives, contact our team at (866) 459-4590 or ClientService@VantageIRAs.com.