There can be a number of advantages to using funds from a Self-Directed Individual Retirement Account (SDIRA) to buy property. So if you had a 401(k) with a previous employer, for example, and rolled that into an IRA, you could use funds from the IRA to buy a recreational property to call your own.
As a recent Forbes.com story describes, monetary gains on such a purchase would be tax-deferred if you sell the property in the future. Using IRA funds in this way would allow you to invest in something you know. And buying a property would give you a way to diversify your investments, while acquiring an asset you and your family can use.
In many ways, a self-directed IRA works like any other IRA, as a retirement investment vehicle that can offer tax-free profits, tax deductions and protection of your assets. But a self-directed IRA offers more options for how the money can be invested.
It’s important to do your homework and get quality advice if you decide to use funds from your self-directed IRA to buy property.
Reflecting the tips detailed in the Forbes.com story, do your research on the buying process and the properties you are interested in.
If you are interested in buying a recreational property where you and your family could camp, hunt, hike or just relax, a member of PotlatchDeltic’s Preferred Broker Network is a great resource for properties in Minnesota, Idaho, Arkansas, Alabama and Mississippi.
As you do your planning, make sure you leave a bit of extra budget for such items as improvements for the property. And take the time to gain an understanding of any tax implications of such a purchase – it’s important to have an accountant or lawyer involved who understands IRAs.
Perhaps the biggest advantage in using IRA money to buy property is that there’s no initial out-of-pocket expense, making it easier to get your own property in time for hunting, fishing and other outdoor activities this fall.
Call or email one of the PotlatchDeltic property experts today to get the process started!