While investing in real estate has been allowed for quite some time, this option was more popular in the past few years. Many people like this option because they see it as being more stable than other forms of investments like the stock market, for instance. That is because a self-directed IRA lets people have these kinds of options, while other kinds of IRAs only let them get things like stocks, bonds, CDs or mutual funds. With a self-directed IRA you can buy real estate or invest in things like gold, silver and notes.
Being able to own real estate inside of a self-directed IRA is a thrilling prospect that lets the person own property such as land, single family or multi-family homes, or commercial property. However, it must be remembered that the real estate owned through the IRA is considered only as an investment and the owner of the IRA can’t use it themselves, nor can any other disqualified people. Plus, any profits produced through this property like rental income or money from it being sold, has to be put into the IRA, and any expenses the property incurs like taxes or any type of improvements has to be paid for via funds from the IRA.
The bottom line is that having a 401(k) retirement plan is a great way for someone to ensure that they will have funds for the future when they retire. It is best to start one as soon as you are able, as that will ensure that as much money as possible is invested in this retirement plan.