Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Why SDIRAs are an Increasingly Popular Method of Investing in Property

By Corwin Smith Subscribe to RSS | March 7th 2012 | Views:
loading
 
  



People, who want greater control over their retirement planning, go the self-directed way. A self-directed individual retirement account (SDIRA) enables them to choose how they invest for their retirement planning. The IRA is managed by a custodian, who ensures that the investments fall under the IRS regulations. Other than this piece of oversight, it is up to the account holder to decide how to invest. Though, custodians also file reports and guide the investor through the investment process.

Common forms of investments include stocks, mutual funds, and bonds. However, many investors would be surprised to know that they can use their self directed IRA to invest in real estate as well, subject to a few conditions. Depending on the custodian, they may or may not encourage this type of investment because of the greater paperwork required for the process, but it is perfectly legal to invest in property.

Why Invest in Real Estate?

With the property market being what it is, this is a good time to purchase a new home, plot of land, or other real estate. Property prices are down and there are many good real estate deals up for grabs.

Real estate usually offers good returns, and you can always enhance the value of property through buildings, renovations, and other value addition processes. Even if you do not sell real estate, the rent on the property can form a significant part of building tax free or tax deferred retirement wealth.

Why Use SDIRA to Invest In Real Estate

While real estate is a tempting piece of the investment pie, many people do not have the funds required to buy land or property. A conventional loan has drawbacks; for example, if you default on the monthly payments, not only is your new property at risk of foreclosure, your personal assets may also be seized to pay the debt.

The alternative is a non recourse loan, which meets the IRS requirement that IRA assets cannot be used as collateral for securing a loan. While on the face of it, this appears to be a major drawback in qualifying for a loan, this rule protects the investor from personal liability in the event of loan default. The lender can only seize the property; they cannot touch other investments or assets that you may own. There are other reasons why the required non recourse loan has advantages over conventional mortgages:

1- According to IRS rules, you cannot invest in property for personal use, or use by your near relatives. This rule, again, saves your home in the event of a foreclosure. While the lender can take and sell the property you bought under the SDIRA, they cannot touch the home you live in.

2- Tax benefits on IRA income is one major reason for investing

3- If you take out a non recourse loan (discussed below) to purchase property through an IRA, it does not reflect on your credit record.

How to Buy Property through SDIRA

Your savings may not be enough to fund the purchase of property, and IRS rules prohibit using the IRA as collateral to take out a conventional mortgage on the new property. Is there a way for you to invest in property in this situation?

Yes. You can take out a non recourse loan against the IRA to buy property and make a down payment using your savings. A non recourse loan, unlike regular loans, does not put your IRA or other assets at risk. If you fail to repay the loan, the non recourse lender can take the property you purchased but cannot touch any other assets you have. This is in line with IRS regulations.

The current low property prices and the expectedly high returns on real estate investments make SDIRA non recourse loans a valuable tool for retirement wealth accumulation.

Corwin Smith - About Author:
For more information regarding Non Recourse Loan, please visit Islandviewmortgage.com

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/loans-articles/why-sdiras-are-an-increasingly-popular-method-of-investing-in-property.htm

Related Loans Articles Subscribe to RSS

No teletrack loans-Easy loan with quick approval
Published by Johnty Bert on December 10th 2011 | Loans
Now, you can get easy loan through no teletrack loans whenever you are in need of additional finance...
 
One month loan: Get Additional Money
Published by Kelse Roy on May 23rd 2012 | Loans
One month loan is the suitable deal if you need money for a while without any security and any other...
 
1 month loan: Quench your Thirst of Finance Easily
Published by Jaken Smeth on July 24th 2012 | Loans
If you are willing to quench your thirst of borrowing money fast, 1 month loan is ready to assist yo...
 
Speed loan: Speed matters with quick individual safe loan
Published by Ian Foster on January 10th 2012 | Loans
Speed loan is connected with loans with chief difficulty and lenders assumed a cumbersome process to...
 
Waiting for approval of your loan? Contact Loan Officer
Published by Wills Loren on March 27th 2012 | Loans
feedbackhere.com : We provide Loan Officer Services most event planners have something directly to t...
 
Unsecured Loan Instant Approval - a best loan one can ever get!
Published by Alice Johnsonn on January 6th 2012 | Finance
Unsecured Loan Instant Approval are highly a motivational deal for people who rather need small amou...
 
1000 cash loan- Ideal financial scheme for you
Published by Morgan Sadyu on July 14th 2012 | Loans
By acquiring quick funds via 1000 cash loan, you can utilize the availing amount of money for many p...
 
Get a loan less than 24 hours- Critical fiscal support to US borrowers
Published by Abell Bush on May 21st 2012 | Loans
The sanctioned amount of funds which taken from this loan can be useful to manage financial worries....
 
Salary Advance Loan- Acquire quick funds via such loan now!
Published by Rex Moshe on July 6th 2012 | Loans
By acquiring quick funds via Salary Advance Loan, salaried persons may easily fight against cash eme...
 
Fast Same Day Loans- Get a loan with the lick of a button
Published by Hector Milla on December 17th 2011 | Loans
Get fast same day loans within 24 hours of approval. All you need to do is fill an application form ...
 
No fee loans: Get out of All Obstacle to Fetch loan
Published by Jaren Lese on June 5th 2012 | Loans
If you have nothing with you and you want to borrow money, you can go with no fee loans where no app...
 
Private school loan for bad credit- Unique loan for private school
Published by John Simen on May 23rd 2012 | Loans
By taking private school loan for bad credit, you can easily manage expenses that require with your ...
 
Personal Loan Tenants:Accepted by loan with quick selection right away
Published by Ian Foster on May 3rd 2012 | Loans
Personal loan tenants are frequently acquirable on somewhat small become awake of, which makes them ...
 
Faxless payday advance- Convenient loan available with low interest rates
Published by Andrew Stomes on May 10th 2012 | Loans
By availing instant funds via faxless payday advance, you will achieve fiscal emergencies without an...
 
Private school loan for bad credit- Ultimate way to gain valuable money
Published by John Simen on July 11th 2012 | Loans
By availing quick funds through private school loan for bad credit, you can manage financial needs o...
 
Apply online for bad credit installment loan- Offers quick funds for everyone!
Published by Bailey Molton on June 9th 2012 | Loans
If you are availing bad credit installment loan, you get quick funds up to $1500. This small fund is...
 
Small payday loan- Impeccable fiscal solution for salaried people
Published by Abell Bush on April 13th 2012 | Loans
By acquiring quick cash through small payday loan, you can combat unforeseen financial trauma with e...
 
Fast cash loan today- Cash advance available with 24 hours loan service
Published by Thoms Stuart on July 17th 2012 | Loans
In order to avoid any kind of financial trauma, it is better for you to avail fast cash loan today. ...
 
Instant loan today- Get money and repay loan on the next payday!
Published by Aldenn James on November 29th 2011 | Loans
If you want instant money then you need to apply instant loan today available online. This is a grea...
 
Things you must know about car loan
Published by Axisbank on May 23rd 2012 | Loans
Not many will say that a prudent and wise way to start the important Endeavour of buying your dream ...