Did you know you can invest in real estate using the funds in your IRA or Keogh plan? While most folks are surprised to hear this, many are interested in learning more about this rewarding opportunity.
Before you jump in though, it's important to know the proper way to invest using your IRA.
With a little planning beforehand, you can greatly increase your chances of a great return.
Learn the Rules for Vesting Your IRA or Keogh plan will have what is known as a trustee or custodian.
This is a very important point to remember.
You must vest in the name of the trustee or custodian listed on your account.
The only time this does not apply is if you qualify as a non-bank trustee.
If you have already purchased real estate using your IRA and your name was mistakenly listed on the title, this error needs to be corrected as soon as possible.
Payments Must Be Taken From Your IRA Account Loan payments for the real estate purchase must be deducted from your IRA account.
This is similar to having a mortgage loan where payments are automatically withdrawn from your checking account on a monthly basis.
You must ensure there are enough funds in your IRA to cover these deductions.
In some cases this may require making additional contributions or cashing in on other assets in order to make a payment.
Whatever it takes, you want to be sure you have enough funds in your account every month.
Just as with a mortgage loan, if you default you could end up losing the property.
Investing with IRAs Investing with your IRA is a serious decision that requires some thought.
You don't want to throw all of your retirement funds into an investment opportunity unless you're familiar with the procedure.
That's why it's a good idea to seek the advice of a professional before making any type of commitment.
An adviser can also assist you in making sure your portfolio is in good working order.
This is especially important if you have beneficiaries.
Understanding Keogh's and Other Retirement Plans A Keogh is a type of pension plan often used by the self-employed and businesses that are unincorporated.
Most Keogh plans are set up using the defined contribution method.
These contributions are usually tax deductible up to a specified percentage of your yearly income.
Keogh plans can also involve profit sharing, money purchase plans, and defined benefits.
It's important to have a thorough understanding of your retirement plan before considering any type of real estate investment.