Did you know that retirement savings in a Roth IRA aren’t limited to investments in stocks and bonds? In the past, it has been common for investors to use traditional investment assets for these accounts. But new opportunities are growing in popularity and could lead to higher gains in the future, such as self-directed Roth commercial real estate.
How it Works
With a self-directed Roth IRA, you have the opportunity to choose the way the money will be invested. Instead of leaving the investment decisions up to the firm that is handling your cash, you can choose the assets that should be purchased by the IRA. This account is viewed as a standalone entity by the IRS, giving you investment options that can shield you from capital gains taxes. Certain strategies can be used for tax deferment to improve long-term profitability that is available.
A custodian needs to be used to oversee the funds that are put into the account. This custodian doesn’t offer any investment advice or financial strategy information. It’s up to you to select the investment strategy and opportunities that are accessed with these funds. For example, you might choose to put the money into commercial real estate.
Pros and Cons of Self-Directed Investments
The upside potential of the right investment offers a promising future for your retirement account. But you need to know that these self-directed investments could cost you a lot of money if something goes wrong. The IRS has detailed regulations in place to manage the way the funds can be used. If these rules are broken, then you might need to pay an unexpected tax bill that could be thousands of dollars.
One of the greatest advantages of choosing self-directed investments is that you can increase the earning potential while minimizing your risk at the same time. Don’t make the mistake of managing the funds without support from an experienced team. If you choose self-directed Roth commercial real estate, then it is essential that you select an investment firm that understands your options and can offer advice and guidance to create the best strategy for your investments.
Good Investment Choices to Improve Future Holdings
The stock market can be a scary option for investors due to the volatility in the economy. If the stock prices drop, then investors can lose significant funds that devalue the investment. On the other hand, real estate investments always have a hard asset even if the market prices change. There is security knowing that a parcel of land or an office building is in ownership if the market is affected.
Many people agree that commercial real estate investing is a long-term strategy. While there are dividends available to help with ongoing cash flow, the biggest financial gains are realized in the appreciation of the property with time.
As you are considering your options for self-directed Roth commercial real estate, you need to talk to industry experts to learn more about these investments. First National Realty Partners is here to help! Call us today for more information about commercial real estate investing.