Wednesday, June 12, 2013
Most people interested in growing tax-free assets put IRA funds into a “self directed” IRA. However, this doesn't work for everyone. Property prices are on the rise so some people are wondering how to invest IRA funds into property purchases to help lower or get rid of taxes and gain a return on their investment. There are a few factors to consider, one of which is the eligibility of properties. People who purchase property need to be sure to buy business property and avoid personal property purchases. Additionally, the IRA funds can only be used to purchase new property not property already owned. People should have enough funding in their IRAs to buy long term rental properties, because a conventional mortgage is not available. Folks should also reflect on IRA investment issues. It is important to note that failure to comply with IRA rules can mean tax penalties. Furthermore, administering the IRA costs money. Consider diversifying your portfolio and speaking with a financial advisor for more information.
See Zillow, How to Use Your IRA to Buy Investment Properties, Forbes, Jun. 6, 2013.