Benefits to Having a Real Estate IRA
If you’re looking to get into property investing, you may want to consider using an IRA for your real estate investments. IRA stands for Individual Retirement Arrangement. This is a legal and financial entity similar to a corporation but designed to make it easier for individuals to invest. A real estate IRA is one type of investment entity that is self-directed, giving the investor control over what the money is invested in — and in this case, it’s real estate.
There are many benefits that come from having a real estate IRA.
Unlike stocks, real estate is something you can see, smell and feel. Worried about how your investment is faring? No need to call your broker — all you need to do is drive past it once in a while.
If you’ve never worked in stocks or bonds the investment process can be quite confusing and where there’s confusion there’s risk of error. Real estate is a more widely relatable avenue, as nearly everyone has rented or bought real estate at some point in their lives. Because you understand it better, you’ll be more able to handle it on your own.
People will always need places to live. Investing in rental properties with a real estate IRA is one way to maintain a steady revenue stream rather than waiting for annual payouts from your investment.
It Doesn’t Affect Taxes
Because a self-directed IRA is its own separate financial and legal entity, you can buy and sell real estate without affecting your personal tax credits and deductions. All expenses are paid for with funds that belong to the IRA, not from your personal accounts, and all revenue goes back into your IRA.
Related: 5 Tips for New Real Estate Investors
For more information about real estate IRAs or to learn how to become a real estate investor, give Real Property Management Evolve Tucson Tucson a call at 520-883-RENT, or 520-883-7368.