Real estate has more than stabilized and the watch is on for residential properties. Prices are increasing for the first time in years, and the foreign influence in real estate purchases has buoyed the market. The residential rebound is a predictor that growth in the commercial market is not far behind. The decreasing value of the dollar in the past years has turned America into a hot spot to buy real estate, and it has become a popular investment for owners of self-directed IRA plans seeking potentially high yield options for their retirement funds.

Many individuals are moving away from paper assets to real estate in the US. The stock market uncertainty caused by debt negotiations, budget concerns, and the worldwide geo-political environment is frightening to many investors. The overwhelming and never-ending requirements to secure a loan from a bank has opened the real estate market to cash buyers. There is actually less paperwork required to obtain a non-recourse loan from the bank using an IRA account than to apply for a loan with a personal guarantee. As a result, many of these buyers are using their IRAs, 401(k)s and/or other qualified plans to purchase investment properties and reap the benefits of tax-advantaged plans with hard, insurable assets. Some IRA use all cash or the IRA secures a loan; cash sales have historically provided for better prices and faster closings. 

Income and appreciation can provide tax-free income for life if established and maintained in accordance with IRS guidelines. Whether tax-free or tax-deferred savings, real estate seems to be the up and coming top asset for self-directed IRA accounts in 2013.  The self-directed IRA market has had a boost in recognition after the release of former presidential candidate Mitt Romney’s tax returns, showing the growth of wealth established in his IRA. The pent up demand of 3 or 4 generations of families living in the same home for many years due to the economic recession has provided a catalyst for home buying and renting. New families emerging and establishing themselves have an increased the need for more rentals. Self-directed IRAs owners are purchasing single family homes, townhouses, student housing, and apartment buildings as an alternative investment in the future. Today’s retirement financial plan must consider risk, and risk is alleviated as many understand that shelter is a primary need worldwide for everyone.

The self-directed real estate IRA has strong potential for income and appreciation coupled with tax advantages that make it a savvy investment strategy for growing wealth in 2013. High return real estate investments can enable investors who have lost time and money to recoup their wealth while utilizing a less risky investment vehicle.