Time to Include Real Estate in Your Self-Directed IRA
An article last month on Reuters explored how rising interest rates are helping real estate-related stocks perform very well amid the broader U.S. equity market; the article stated that investors are putting money into real estate investment trusts (REITs), betting that these publicly traded assets will provide a better return as the Federal Reserve continues to tighten monetary policy. Real estate sector stocks have declined at half the rate of the overall market since February. All this may signal a good time to include real estate in a self-directed IRA.
Interest Rates Expected to Rise
The Fed is expected to raise rates at least twice more this year (there was an increase in March), and rising rates generally indicate a strong economy. This in turn usually results in an increased demand for all types of commercial property—the type of property that self-directed investors can invest in through their retirement plans. The article went on to say that the Standard & Poor 500 real estate sector had been in decline since the start of the year, but was trending higher this quarter, which suggests more positive investor sentiment. And, according to research by the National Association of Real Estate Investment Trusts, if inflation remains moderate amid economic growth, REITs may outperform the broad stock market. Again, this may signal that for savvy investors who already know and understand real estate assets, the timing could be great for adding investment real estate in a self-directed IRA.
Rising Demand in Real Estate
The rising demand in real estate will also drive up rental rates, boost net operating income from investment property and increase real estate valuations along the way, providing relatively strong returns for the self-directed IRAs that have invested in those assets. Self-directed investors may include a broad array of non-publicly traded assets in their retirement plans, including essentially any kind of real estate: multi-family housing, warehouses and industrial properties, retail or office properties, and even vacation rental property. If you have your eye on a commercial or residential investment property to include in a self-directed IRA, our helpful Real Estate Investment Kit has all the forms you need to make it happen after opening a self-directed retirement plan at Next Generation Trust Company. Our Starter Kits will walk you through all the steps to open your self-directed retirement plan and get it funded, and our team is available to answer any questions you have. Contact us at Info@NextGenerationTrust.com or 1-888-857-8058 if you need assistance.
Stock Market’s Got You Down? Consider Alternative Assets as a Retirement Plan Pick-Me-Up
The stock market’s performance in early February likely has many savvy investors thinking about alternative (“alt”) funds as a hedge against market volatility. According to FINRA (Financial Industry Regulatory Authority) alt funds might invest in assets such as global real estate, loans, start-up companies and unlisted securities that offer exposure beyond traditional stocks, bonds and cash.
Luckily, you can replicate what alt funds are doing by establishing a self-directed IRA and investing in your choice of non-publicly traded alternatives.
There are many alternative assets that investors may include in their self-directed retirement plans as a way to diversify their retirement portfolios—and build retirement wealth with nontraditional investments they already know and understand.
- Interested in being someone’s angel investor?
You can include private equity in your self-directed IRA.
- Do you already invest in precious metals like gold and silver?
Your self-directed IRA can own them too—as long as they’re stored and held at a depository.
- Thinking of investment property?
Your self-directed retirement plan can invest in rental property, office buildings, multi-family housing, warehouses, raw land, rehabs and more.
- Does someone you know need a loan to pay for college?
Your self-directed retirement plan can make that loan and earn tax-advantaged interest as the borrower repays it.
These are just some of the myriad ways you can include nontraditional investments in a tax-advantaged retirement plan. And, when you open a self-directed IRA with Next Generation Trust Company, you get complimentary education, full account administration, transaction support and asset custodial services under one umbrella.
If you’re interested in perking up your portfolio with alternative assets you already know and understand, check out our Starter Kits to open an account and sign up for our monthly newsletter for timely tips. Have questions? Contact our team at Info@NextGenerationTrust.com or 1.888.857.8058
Did you miss our last Self-Directed Webinar?
Last Thursday, Next Generation Trust Services had the pleasure of working with Wen Hsu of Keller Williams, NYC and Tony D’Anzica of Dynamax Realty and Manhattan MLS, Inc to produce an informative webinar regarding real estate trends and using your retirement plan to make these purchases.
In case you missed this educational self-directed webinar session you can access the recording of this hour long seminar right here! Covered within this webinar are the following topics:
Manhattan Real Estate Investment Trends
Real Estate Investment Strategies
Buying Real Estate in Your Retirement Plan