My IRA has three bedrooms, a kitchen and a garage. Best of all, it sends me a tax deferred rent check every month. Just think of the sales you could generate if your clients invested in real estate with their retirement accounts.
Today, investing in single-family rentals is no longer the province of a few. Millions are buying and renting out homes, including some of the nation’s largest institutional investors. As of January, investors are raking in an average 8.6 percent return on their investments annually, according to CoreLogic.
However, what’s really great about real estate is that, unlike stocks and bonds, you don’t have to sell your property to generate cash. Rents create a steady flow of cash that you can spend—or use to invest in even more real estate.
Best of all, the same tax policies designed to encourage workers to save for retirement by investing in securities also work for real estate. Without paying a penny of tax, you can use your rental income to purchase another home that you rent out to generate even more cash. You can’t do that with securities, precious metals or some of the more popular investment options today!
Simplified Employee Pension Individual Retirement Arrangements, or SEP IRAs give employers and employees a great deal more flexibility for investments than traditional IRAs as long as certain rules are followed. They’re simpler to set up and administer than traditional IRAs, and SEP IRAs don’t accept employee contributions, but they do cover business owners. They are ideal for self-employed workers to save for retirement. Like traditional IRAs, contributions and interest income are not taxable until the worker retires.
