In the last 12 months, those who use an Individual Retirement Account to save money for their post-workplace lifestyle have put $450 million of their funds into real estate, according to IRA Financial Group, New York.
Low-on-cash investors are seeking alternative sources of funding and self-directed IRA accounts are allowing these investors to purchase real estate on a tax-free basis, the company explained.
The Internal Revenue Service permits IRA funds to be used to purchase real estate, both in this country and internationally.
“It's been an extremely rewarding experience to help so many people make real estate investments and to support the domestic real estate market,” said Adam Bergman, president of IRA Financial Group.
Self-directed IRA structures have developed into a valuable source of funding for real estate investors and as a result made a significant contribution towards strengthening the U.S. real estate market. Home purchases typically pump thousands of dollars into local economies as new owners often add new paint, carpet, appliances and roofs to their investments. This translates into job growth for related services.
“With the use of our self-directed IRAs, investors have side-stepped the tight credit markets by using their retirement funds to make investments,” said Bergman. “One of the advantages of using a self-directed IRA to purchase real estate is that all income and gains generally flow back to the IRA tax-free.”
