What Role Does Your 401k Play - Long Term Rentals

[Senad Salihovic]

Hey everybody

I am wanting to know what role does your 401k play when it comes to investing. 

Do you use it as reserves when getting a loan? Do you still contribute to it?

What benefits does it give when buying rentals? 

Would you recommend a young investor if contributing to 401k or wait till a decent amount of property is bought.

Im 24 and have a couple thousand in 401k nothing much, will it be beneficial to keep adding to it, my employer matches every dollar I put it in up to 8% 

or save the money instead and build cash reserves?

[Dmitriy Fomichenko]

@Senad Salihovic

If your employer provides matching you should contribute up to that amount. This is free money and it would be financially foolish give that up.

You can not buy real estate with conventional retirement account - you need a self-directed IRA or 401k. There is plenty of info about that on this forum, do some search and it'll keep you busy reading for hours and hours.

Because of your younger age - consider post-tax contributions into Roth. While you don't get any tax benefits now, you have long term for your money to grow tax-free which will surpass missed tax deduction now (this is general advice, I don't know your personal financial/tax situation and I'm not a CPA). 

Hope this helps.