Real estate IRA s seem to be a best kept secret among folks we all look to for financial advise. Many speculate that's because Wall Street brokers don't have the expertise or profit potential with real estate sales. Yet, unlike sophisticated funds, options, stocks, etc. that the common consumer knows little about, real estate is an investment type that most Americans believe in and have experience in, too. Maybe it's time to really diversify and put some of your retirement money into real estate.
What about returns? Like gold, real estate is a tangible asset, one that has solid intrinsic worth. History shows it appreciates on a compounded basis, can be leveraged (borrow & use other peoples money even in an IRA), and if used as rental property, generates income, too According to Liz Ann Sonders, chief investment strategist for Charles Schwab & Co and White House consultant, "the national median home price has never fallen in a calendar year since the Great Depression". 1. Sure, home values are down in some parts of the country but even so, they have never seen the mass volatility that we've watched in the stock market lately.
In Greenville and the Upstate South Carolina area, the market is stronger than the national picture. Our annual appreciation has averaged 2-4% for several years. Granted, we haven't enjoyed the dramatic gains of some hot markets but now even with the country's financial troubles, we've avoided the sharp declines, too. Recent stats show that our market's YTD median home price is UP 1.6% Jan to Oct 31, 2007 to 2008.2
Thanks to the inherent appeal of the upstate with our mild seasons, beautiful mountain views, economic affordability, Southern hospitality, sophisticated arts, low unemployment and quality of life strengths, the upstate was recently ranked the 4th best place to relocate to. 3 Just last week in another survey,Greenville was ranked the 5th best place NATIONWIDE to ride out the Recession. On the long term horizon (which is the one for retirement funds), upstate SC real estate remains a smart investment. The authors of the book, Tax Free Real Estate Investments comment that real estate IRA investments have so many advantages over all other types of investments that are " dramatic, identifiable, repeatable, measurable and consistent. " "Anyone wanting to accelerate the build up of their retirement nest egg should include, if not exclusively focus on, real estate as the preferred mechanism".4
Real Estate IRAs are definitely worth investigating. And there's an abundance of great values all around. Look for my future blogs explaining how they work and how to set one up.
If you want more information in the meantime on Real Estate IRAs, investment clubs, or finding investment properties, just click on the link or send me an email.
Resources cited in this article:
1.The Insider's Guide to Tax Free Real Estate Investments, Diane Kennedy, CPA, Dolf de Roos, PhD, 2007, John Wiley & Sons, p218.
2.Greater Greenville Association of Realtors, "Cumulative Historical Statistics as of !!/10/2008".
3. The Greenville News, "Greenville Continues to Earn Praise", 5/24/2008.
4. The Insider's Guide to Tax Free Real Estate Investments, Diane Kennedy, CPA, Dolf de Roos, PhD, 2007, John Wiley & Sons, p223.
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