Real Estate and Investments for Your Retirement - Know Your Options

Real estate investing for retirement is becoming more and more popular. But, as with everything involving real estate and investments, you have to do your homework. Not only do you need to do your due diligence in buying and selling properties, but you also need to understand your tax and retirement responsibilities when using real estate investing for retirement.

Holding Your Real Estate Portfolio

Anyone can begin buying and selling real estate and plan on using the money for their retirement. However, without proper tax planning, you can get stuck with large tax bills that eat into your profits. Even if you are only paying the lower capital gains tax rate, you could be growing your real estate investments more tax efficiently in your Traditional or Roth IRA. Contrary to popular belief, your IRA can invest in almost anything with the exceptions of life insurance and collectables. Many people utilize real estate as a retirement asset because they know and understand real estate better than they understand the stock or bond market. However, for someone looking for current income, it may not make sense in all situations to utilize the self-directed IRA. Speak with your financial and tax professionals to determine what is best for your situation and particular asset.

Types of Real Estate Investments

While there are many ways to invest in real estate, the two most common real estate investments for retirement are buying rental properties that produce income and flipping properties in hopes of appreciation. Each type of real estate investment has a legitimate place. It may take a lot more skill and risk tolerance to successfully flip real estate, especially if you are using all of your assets. The amount of risk an investor takes with real estate and investments typically depends on how far away they are from retirement, their experience with real estate and their current mix of retirement asset types.


If you are just starting out with real estate investing for retirement it can potentially make sense to begin conservatively. Beginning with a rental property that slowly that can produce income and could appreciate in value over time can be a better approach to real estate investing over short-term or speculative real estate transactions. The key to real estate investments is to steadily build wealth while maximizing income potential and taking advantage of tax breaks where you can. Keep in mind that if you try to get rich overnight you are just as likely to lose everything. Lastly, remember to perform your due diligence with all investments and to consult your financial and tax professionals.

If you’d like to learn more about self-directed retirement investing, please contact New Direction Trust Company at 877-742-1270 or