Did you know that you can dramatically increase the 401k returns you’re getting by investing 401k money in real estate? This article will explain the benefits of doing this, how this can be done, and what kind of returns you can expect, all by using a self investing IRA.
First of all, lets go over what a self investing IRA is. A self investing IRA (also known as a self directed IRA or self managed IRA) is a retirement account that allows you to have total control over what you invest in using your retirement funds. Don’t run off just yet though; it’s really not as scary as it may sound….
Owning a self investing IRA is not a situation where you would be directly and solely responsible for every transaction made in the account. An outside party, specifically an eligible “trustee” or “custodian”, is required to hold all assets in the IRA on behalf of the owner. This is all part of IRA regulations. However, this custodian or trustee simply listens to what you, the account holder, wants to do and they act accordingly. Also with a self investing IRA, you get to benefit from a much wider array of assets your account can hold.
Do you see how this may be better than keeping your retirement funds in a 401k account? With a 401k retirement account, or even a regular IRA account, an “investment adviser” manages your account completely. This investment adviser decides what you will invest in, along with all other transactions within your account. With this kind of situation, the account holders best interests are not always keep high on the priority list.
But with a self investing IRA, YOU are in control of what transactions go on within your account. Yet, your designated custodian is responsible for making sure everything is in compliance with federal law and for filing all the necessary paperwork, including all records and financial reports.
So what does this all have to do with investing 401K money in real estate? Well, many people are not too happy with how their 401k plans are being managed. As a result, more people are looking for other options that create better returns. To create these “better options,” you can rollover your 401k into a self-directed IRA, which as you already know, creates much more options to invest in.
In today’s economy, investing 401k money in real estate is one of the best options out there. Even though no new homes are being build, the high foreclosure rate leaves thousands and thousands of families looking for affordable housing. And many foreclosed homes can be bought at a extremely low price, and can later be quickly “flipped” or used as rental property.