Building wealth is a bit like dieting, in that everyone has different advice for you. “Cut up the credit cards,” personal finance gurus say, “and don’t buy that morning latte every morning.” Others say that stocks are the one true—and only—way to achieve prosperity. But is there any truth to these ideas, or is an option like a Real Estate IRA just as valid as any other path to wealth?
To figure it out, we’ll have to cut straight through the clutter. Let’s debunk three misconceptions about retirement investment in real estate right off the bat.
Misconception #1: The Real Estate IRA is Unpredictable
True: real estate is an investment that comes with risk. But if you know of any investments that don’t involve risk, please, tell the world—because we’d like to hear it.
The truth about Real Estate IRAs is that they can be much more stable than you might imagine, particularly if you invest in properties that consistently generate earnings through rental income. Think of it as receiving a dividend from your property every single month rather than every quarter.
Additionally, real estate is one way to diversify your portfolio out of the stock market, giving you a wider net for retirement. Not only is this better for the long-term stability of your portfolio, but it can be great for your peace of mind.
Misconception #2: You Need Access to Huge Loans to Finance Real Estate Investments
Some people are scared off from real estate investing because they think they’ll need huge, life-changing loans in order to buy any property worth owning. That simply isn’t the case. You will use non-recourse loans in a Real Estate IRA because of regulations, and these non-recourse loans actually afford you many protections. It essentially creates a layer between the real estate and your personal property.
Yes, it can be pricey to invest in pricey real estate. But that doesn’t mean you have to buy pricey real estate. There are stocks on the market that cost hundreds of thousands of dollars…and then there are perfectly valuable stocks that will cost you dozens of dollars, or even less. The key is in finding the value, and that applies to any investment.
Misconception #3: Real Estate is Too Complicated to Learn
You don’t need to have a lifetime of real estate experience to make money off of it. All you really have to do is achieve a property that earns more money in income than it costs to keep and maintain it.
In a Real Estate IRA, you’ll use a property manager to handle many of the ins and outs of being a landlord, which takes a tremendous burden off your shoulders. And while no one would recommend that you buy your first real estate investment property without doing your homework first, the simple fact is that many people across the world use real estate to build wealth. It’s not some exclusive VIP club for those who know all about real estate, with outsiders looking in.
That being said, it’s important to know all about the Real Estate IRA before you make any decision. That’s why we’ve put together an entire section on Real Estate IRAs for you to peruse. There you’ll learn about the specific issues involved with owning real estate through an IRA—including limitations and benefits.
Want to know more? Keep browsing our site here at www.AmericanIRA.com or give us a ring at 866-7500-IRA. Education is the key to blasting through the misconceptions—and we encourage you to learn all you can when it comes to protecting your assets.