So you've thought about buying rental property in Texas...did you know you can use your retirement plan? If you have a cash balance in your IRA, 401(k), or Health Savings Account, you could use that tax-advantaged money to buy investment properties.
There are plenty of opportunities to pursue a real estate IRA in Texas. The Lone Star State boasts lower costs of living, a broad job market, and other such factors that attract new residents every year. An influx of new Texans can pump demand for living space and create investment opportunities.
What's the difference between purchasing rental property with your IRA and investing with your personal, non-retirement money? Did you know that retirement plans that hold real estate still carry the same tax benefits as those that hold stocks, mutual funds, or money market accounts? As you can see, investing in property with your retirement plan can be very similar to investing with your personal money (except your retirement plan offers major potential tax benefits for your earnings!). There are other IRS rules surrounding self-directed retirement investments, so please don't hesitate to contact our office with questions.
|Tax-Deferred Account||Taxable Account|
|My asset made money! |
Will I pay taxes this year?
|No! Earnings on account-owned assets can be completely tax-deferred.*||Yes|
|Can I get a mortgage to finance the investment?||Yes! Your account can take out a non-recourse loan to fund some (or all) of the real estate deal.||Yes|
|Can I partner with other investors?||Yes! You can pool your retirement money with other investors (or their retirement plans) to fund the same investment.||Yes|
|Who chooses the property?||You! Your account is the "investor", but self-direction puts you in control!||You|
|Am I limited in my property options?||No! Your account can purchase rental property (residential or commercial), fix & flips, raw land, etc.||No|
*Unrelated business income tax may apply. Contact New Direction Trust Company for more information.
Buying property and renting it out with your retirement account has never been easier! At New Direction Trust Company, we combine technology that allows for easy online account management with live, knowledgeable representatives to help you through every step of the process. From the opening of your account, to the funding and management of your real estate deal, and until the day you decide it's time to sell, New Direction Trust Company is with you!