With Social Security becoming less and less secure, IRAs are almost required to fund retirements for most people. Now, it is coming to light that there is an investment choice called the real estate IRA which allows you to buy land for sale and other real estate to put in your portfolio.
1. First learn, and then be ready to explain to others.
You will have to educate the professionals you need to set up and run your real estate IRA in many cases. That means doing research and getting the basic rules down for yourself. You will need a trustee; this is usually done by an attorney. You might also need a realtor and a management company. If you know how to be your own realtor, you can eliminate one position in the group you are gathering, because you can buy land for sale yourself.
2. You can buy land for sale, but not for immediate personal use.
An IRA is meant to be an investment vehicle. If you use land or property for personal use now, the primary focus is not on investment. This is against the rules of the IRA and will not be allowed. You must buy the property or land for sale with the immediate purpose of investment only.
3. You can rent out the property.
You can rent out the property, but only through a management company. The management company collects the rent, maintains and improves the property, and handles all the finances through your real estate IRA account. All those funds are added to your investment into the future.
4. When you retire, you can take distribution of the properties.
In a real estate IRA, the properties can be sold and the profits can be given to you in the same way distributions are usually made in a traditional IRA. However, with a real estate IRA there is an additional option. The individual properties can be distributed to you rather than cash. That means that you can invest in a dream home in your 40s, have your management collect rent and add that to your real estate IRA for a decade or two, and then receive the home in distribution when you retire. At that point, you are allowed to live in the home you have always wanted.