Buying Charleston area real estate has long been one of
the preferred ways to save for retirement, so the attraction of merging it with
IRA benefits adds a tax dimension. In its own right, buying real estate in Charleston,
SC as an investment combines the security of owning a physical asset with the
relatively predictable income flow a rental property produces. And if Stan
Humphries (Chief Economist at Zillow) is correct, in 2014 prices are expected
to cap last year’s 5% gain by rising a further 3%. Put it all together and it’s
clear why some retirement-minded people think that buying Charleston real estate
in an IRA is an attractive proposition.
Self-directed Investment Retirement Accounts are largely similar
to other IRAs. They allow investments to grow on a tax-deferred basis until
retirement time. They differ by allowing a broader range of investment options—qualified
by some specific restrictions.
Self-directed IRAs are required to be administered by
licensed investment professionals designated as “custodians.” They make sure
that all the i’s are dotted and the t’s crossed when the account is funded (either
by depositing cash, or moving funds from an existing 401(k) or IRA). They also mind
the specifics regarding the types of investments that are allowed. Investments
in land, buildings, commercial and residential real estate are typically green-lighted
as long as you are not buying real estate that either you, your business, or
related parties will ever use.
The rental income and other profits that are earned by a
real estate investment must be retained within the IRA account, just as expenses
must be paid from it.
Buying real estate in Charleston, SC in a self-directed IRA
isn’t always the perfect vehicle to hold all of your real estate investments.
The limitations on who can rent a property plus the paperwork requirements mean
that it may not be suitable in some scenarios. But when used appropriately, it
provides many forward-thinking investors an attractive tax-free retirement
investment—your financial advisor’s input will help you make that decision. And
for more ideas about buying real estate in the Charleston area as aninvestment, contact me anytime!
Interested in selling your
Charleston area home? Visit: www.jeffcookrealestate.com
Interested in buying a Charleston
area home? Visit: www.discovercharlestonareahomes.com
-Jeff Cook
Jeff Cook Real Estate
Charleston, SC
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