How to Use a Simple IRA for Real Estate |
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How to Use a Simple IRA for Real Estate

Most Americans are familiar with a traditional IRA account that is used to build and measure wealth over a period of years. Adults who are self-employed or working adults who are part of a teacher's union or other group do not always have the option of a traditional IRA account. A product known as a savings incentive match plan for employees (simple IRA) is a common account to have. The good news is that anyone can learn how to use a simple IRA for real estate investing.

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Benefits of a Simple IRA Plan 

Many small companies that have 100 or fewer employees often back a simple IRA for workers. It is now becoming more common for a company to match an employee's deferred income contribution up to 3% or provide a flat 2% sum for the year based on contribution limits. Due to the minimized costs, it is likely that many adults who are considering a real estate purchase this year have a simple IRA investment account. 

What is a Self-Directed Simple IRA?

A standard account requires an appointed trustee who will oversee the investment decisions. Because this type of account can be used to buy forms of real estate, approvals must made by the trustee. For a person who rolls an account into a self-directed option, the bulk of the investment decisions can be made independently by the account owner only with final approval by the trustee. This offers an investor more freedom when buying a turnkey home for sale. 

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Purchasing a Investment Home with an IRA

Someone who has a simple individual retirement account has the option to purchase an investment property using funds already accumulated in a qualified account. The process can take a couple of weeks to ensure that the purchase agreement will clear the title company. This period of time is standard in the housing industry.

All rental income that is earned by the IRA must remain in the account and cannot be withdrawn to pay off a mortgage or other form of debt. The purpose of a simple account is for income growth that can be used tax-free at the age of 59.5. The income that is earned is generally able to grow without capital gains taxes or other common taxes. This boosts the value of the IRA compared to regular investment products. 

Early Retirement Investing with IRAs

Saving up funds to use for retirement is a strategy that can be helpful to some adults. Buying real estate with the help of an investment account is not difficult although does come with rules for investors. Someone who is between the age of 30 and 59 can successfully buy a rental home with a simple IRA, 403b, self-directed IRA, Roth IRA or other type of account when IRS guidelines are followed. Because earnings in an IRA will likely grow tax-free, the built up wealth using this strategy can be lucrative for someon that is planning on retiring early in the U.S.

The JWB company supports use of investment accounts to purchase a rental home that is fully managed. Most employer-sponsored accounts, small business accounts and traditional IRA accounts can be used to invest successfully. While every investor has specific goals, growing funds monthly to help with retirement is a solid approach for investors.

A Smart IRA Investment Approach

Setting up an account for a simple IRA can be accomplished using a qualified provider. A person who already has an account and funds needed to invest can often expedite the purchase process. Private lenders now work with JWB to create all loans needed to legally buy properties. All turnkey real estate through JWB includes a tenant lease as well as world-class property management services. 

Making smart investments a few years before retirement can payoff for the average investor. Because real estate almost always goes up in value, no issues with stock market losses will affect the value of the IRA holdings. A free guide can be downloaded right on this page that explains in more detail the approach that is already benefits hundreds of property investors in the U.S. and in other countries.

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