Most people think about investing in real estate in their personal name or holding it inside an investment company (such as an LLC). But many people are discovering that there are other options, including self directed 401k real estate investing.
That’s right, you can hold real estate in your self-directed 401k. It’s a powerful way to put your retirement fund to work by owning a cash-flowing asset and letting the income grow tax-deferred or tax-free until retirement.
If you want to grow your retirement account and don’t want to put that money into the volatile and speculative stock market then this might be a strategy you’ll want to consider.
Self Directed 401k real estate investing is becoming increasingly popular among investors in Buffalo who want more control over their retirement funds. Instead of being limited to traditional stocks and mutual funds, a self directed 401k allows you to invest directly in real estate and other alternative assets.
Below, we answer the most frequently asked questions about self directed 401k real estate investing in Buffalo, so you can decide if this strategy fits your financial goals.
Self directed 401k real estate investing in Buffalo – is it possible?
Yes you can! Most people are only aware that they can invest in stocks or funds in their 401k or IRA but you can also invest in real estate. (Some IRA custodians don’t want to hold real estate for you, which is why you should find a self directed IRA custodian who will).
You simply purchase the property in the name of your 401k (not your personal name) and all income goes into your 401k. You can even pay for any management fees inside your IRA as well.
Should I invest in real estate in Buffalo NY with my self-directed 401k?
What you choose to invest in is up to you. However, many investors are discovering the power of putting a cash-flowing asset into their 401k. That cash flow is like having an extra contribution each and every month in your retirement account!
Absolutely. Self directed 401k real estate investing involves IRS rules, legal structures, and financial planning. Speaking with a tax professional, financial advisor, or real estate expert in Buffalo can help ensure you’re set up correctly from day one.
Imagine the power of a consistently cash flowing asset that adds to your retirement account month after month after month with little or no work on your part. Wouldn’t that suddenly transform your retirement from something you’re worrying about to something you’re looking forward to?
You might even find, like many investors do, that putting a few cash flowing properties into your 401k could allow you to retire even sooner than you realized! What would life be like if you didn’t have to wait until aged 65, 70, or 75 to retire but could retire right now?
(And don’t forget about the amazing tax benefits: Depending on your 401k plan, that income could grow tax deferred or even tax free!)
Okay, how do I move forward and start investing in my 401k in real estate?
Before you can invest in real estate, you’ll need to move it to a self-directed custodian that allows you to hold real estate (not all of them do). This can be done pretty quickly and most custodians will help you make the transfer with just a bit of paperwork.
If you want some help, ideas, or even an introduction to a self-directed 401k custodian, we can help. Give us a call at 716-403-2016 or fill out our form and we’d love to help you make this smart move to self directed 401k real estate investing in Buffalo.
Self directed 401k real estate investing in Buffalo offers a unique opportunity to grow your retirement savings using real estate assets you know and trust. When done correctly, it can be a powerful long-term wealth-building strategy.
If you’re considering investing in real estate through a self directed 401k, take the time to understand the rules, evaluate local opportunities, and build the right team to support your goals.