Direct real investment options have turned out to be a popular option amongst investors who are eying retirement to want to get maximum benefits of the real estate’s potential and its exceptional abilities as an inflation hedge and portfolio diversifier. However, unfortunately there are only about 2% of the retirement account that get invested on real estate, but the inception of IRAs has undoubtedly changed the scenario where more people are encouraged to go with self directed real estate investment with their IRA.
Advantages of Self-Directed IRA
Self directed IRA is a primitive account that allows the owner to take investment decisions and even choose the appropriate from of investment. For example, an IRA owner has the ability to choose from a wide range of investment options such as bonds, stocks, leading australian real estate investment trust (RIET) and other non-traditional forms of investment too.
In order to use this IRA account the owner must be qualify the eligibility criterions along with a certified custodian or trustee. Generally, the work of the trustee is to offer administrative service like maintenance of important records, filing IRA reports, issuing customer statement, acknowledging the terms and conditions that govern IRA accounts and dealing with real estate investment trust or other possible forms of investment.
Guidelines of IRA Accounts for Real Estate Investment
If you hold an IRA account and have decided to invest on the real estate market then there are certain guiding principles that you need to be aware of. These principles build the framework of your investment, and help you to realize what makes real estate investment an exceptional match for your IRA accounts
• The RIET should always pay 90% of the net income to the shareholders
• They should incorporate a minimum of 100 shareholders and no more than 50% of the shares can be owned by the individuals.
• The working and operations should always be managed by a qualified board of directors
• The trust should invest almost 70% of the asset on properties and get 70% or more in the form of interest on mortgages or revenue.
Safe and Reliable Investment Option
Though RIET directed by IRA is considered to be a new form of investment, yet the returns that one can receive from it are remarkable.
Important thing that should always be noted here is that you need to count on a reputable, qualified and creditable trust so as to endure maximum returns from the investments that you make. Because trustees do have to play a major role here, and without them you will never get the results that you always wanted to have. Hence, identify the right trustee for your investment plan and then go for it!