Most investors fail to understand the benefits of adding real estate as a wealth building tool for their retirement portfolio. Real estate has created wealth for many years and can serve as a means to create wealth for generations to come. Creative real estate investors have been making money both inside and outside their 401K and IRA accounts for many years. It has only become more aware by the general public since the 2008 stock market crash.
An option for using 401K and real estate investing together is to place the money into an IRA, SEP IRA or SIMPLE IRA. In order to accomplish this, you will need to establish what is called a self-directed account. This type of account provides the account holder more diversity regarding investment options. Several self-directed account custodians offer such account and can be established within a few days to weeks. The timeline mostly depends on the account holders funding method and account option selected to established the investment.
One of the most popular options to consider when investing in real estate is multifamily property investing. This asset class consists of small multiplex units to larger commercial multifamily apartments. The process of making a profit with multifamily rental properties is straightforward. Since there are several units in one building you have the ability to rent each unit out for a set price each month. Each unit will vary in rate due to factors such as size, market availability or current market rates. Compared to single family homes, you have the ability to reap benefits of economies of scale.
Multifamily rental properties can be challenging to manage if you decide to take on the process of managing the units. The process might be considered challenging, but it can also be very rewarding for the property owner. Most of your time will be consumed by handling tenant problems, such as maintenance issues and ensuring timely rental payments are submitted.
Issues such as the aforementioned, does not have a set day or time for its occurrence. Therefore, you may find yourself working nights and weekends. Not to mention the time away from family and work if you are employed. If you are not excited about the management aspect of multifamily properties, you may consider hiring a property management company.
You can hire a property management company to assist you with all of the day to day tasks that can be quite time consuming. These companies will help to collect your rent each month, and will also be responsible for all of the repairs and overall well-being of the property. Of course you will have to pay for this service, but for most multifamily rental property owners it is well worth the money. In general, real estate investing can provide the following opportunities to help you 401k or IRA account to secure your future.
[h3]Your 401K or IRA can win 6 Ways with Real Estate Investing[/h3]
- Cash Flow
- Equity Capture
- Principal Pay Down
- Appreciation
- Depreciation
Creig Stephens is a retirement strategist specializing in helping the self-employed who fear they lack sufficient capital from their operations to funds their ideal retirement lifestyle. His diverse financial background and education, allows him to extract cash-flows from hidden business value to help grow small business retirement accounts.
He is managing partner for Crowne Equity Partners, LLC a firm specializing in B to C class multifamily apartments with 100+ units located in emerging markets. He provides the strategic vision and analytical skills to underwrite undervalued properties that provide significant returns for CEP’s private partners.
To learn more about “Self Directed IRA” for small business owners, go to www.cepinvestira.com or www.creigstephens.com “An Expert in Diversification” to get tactics to locate hidden business cash flow that can be used to diversify and fund your ideal retirement lifestyle.
