Technology Brings Efficiency to IRA Investing

It is no secret rental properties are good investments. Rental properties in retirement plans, however, are not as widely considered, but the word is getting out. Self-directed retirement plans that hold alternative assets have seen steady increases in popularity over the last several years. Real estate, private equity, private money lending, and other such investments allow investors to diversify their portfolios. When combined with the tax advantages offered by IRAs or 401(k)s, these alternative assets provide new opportunities for long-term financial success while utilizing business strategies investors are already familiar with.

Passive investment strategies involving common securities like stocks or mutual funds allow investors to experience growth with minimal effort, but earning potential can be limited. Alternative investing can generate greater returns, but they also involve a new set of IRS guidelines and task the investor with holding their funds with a self-directed retirement administrator. Understanding the rules including titling requirements, disqualified persons, and other such considerations could make real estate investing with a retirement plan seem impractical or burdensome.

How can investors merge the lucrative opportunities of the real estate market and the tax advantages of retirement plans, all while alleviating the added stress of completing extra paperwork and learning new laws? The same thing that makes everything easier in the 21st century: Safe and speedy online transactions.

Technological platforms are making it easier than ever for investors to manage retirement plans, submit or accept payments, and initiate new investments. These management undertakings allow self-directed investors to efficiently exercise control over their alternative assets while remaining within IRS compliance throughout the process.

Just as technology in the self-directed retirement field has advanced, online services have been developed to reduce the complexity of once-stressful business transactions. Even as the internet has provided a solid avenue for advertising, leasing to a new tenant often meant meeting in person to complete a credit application, submit supporting documentation, and performing other tedious tasks. Technology has evolved to allow the completion of these steps almost entirely online shortening the timeframe between the initial contact and a rented property.

Investors have greater access to their self-directed retirement accounts. The inefficiencies of the past are being eradicated without compromising the security of personal information, and without drawing any undue IRS attention. If you are already in the business of owning and managing rental properties, you are already equipped to integrate these assets in your retirement portfolio.