Purchase Real Estate With Small Business Retirement Plans

“The best investment on Earth is Earth.”

Louis Glickman

There is no denying the fact that real estate has brought riches to several generations of people and even in the ancestral period, a man was recognized by the size of land he had. The rules haven’t changed much and real estate still remains one of the best investments on the planet. If you are an active or even a passive investor, chances are that you must have read about real estate investing or attended seminars discussing ventures of successful real estate investors. The lack of initial capital or down payment is one of the limitations faced by average investors, confining them to the traditional investment landscape. According to a new U.S. housing report from RealtyTrac, an average buyer in the U.S. paid 14% down payment or $32,141 in 2014 or even higher for highest-priced counties. If you are planning to invest in real estate, small business retirement plans bring forth an excellent opportunity.

Retirement plans such as Solo 401k are designed to offer lucrative investment opportunities to self-employed individuals and small business owners. These plans allow investing in real estate, precious metals, private businesses, and similar investments that outpace the traditional investment vehicles. The IRS allows real estate investments through small business retirement plans, provided the transaction is a qualified one.

3 Benefits of Investing in Real Estate with Small Business Retirement Plans

• Steady cash flow generation: A real estate property creates stable income stream in the form of rent payments, which can outmatch other traditional investment returns even after insurance cost or other maintenance charges. For monthly rental money directed to the Solo 401k account, you will not have to pay taxes upfront, which mean your investment will grow tax-free.
• Checkbook control to benefit from market conditions: It is often said that you make money while buying real estate instead of selling. Real estate investing is all about reading the market and knowing where to invest for maximum returns. Solo 401k retirement plan offers the checkbook control feature under which, you can buy real estate by writing a check. You don’t need custodian consent or satisfy any terms or conditions for making the purchase.
• Buy domestic or foreign real estate: Small business retirement plans allow you to purchase properties both in the United States and other countries. The market conditions vary from country to country and bargains are often struck during periods of financial turbulence. You can buy vacation properties or retirement home in any country of your choice.

On top of these benefits, adding real estate in your portfolio provides necessary diversification for passive investors. If you are a small business owner or proprietor, it is time to leverage the investing opportunity of Solo 401k retirement plans.