Moving Overseas? Take Your IRA for Real Estate Investments
Regardless of what has attracted you to considering living out side of the United States, why leave your IRA behind? You may have the option to exit the roller-coaster ride of the stock market, without taxes and penalties, and invest directly into real estate investment opportunities within the foreign country of your choice.
Through a self-directed IRA, you can purchase investment rental real estate, LLC interests, stock in foreign corporations, timber and teak investments and farmland investments and much more. Needless to say, your current stock market advisor for your 401k or IRA is not likely to be a strong advocate for you taking control over your accounts because they won’t receive a commission on what you choose outside the market.
As the CEO of a leading self-directed IRA administration company, I have seen many clients who have moved offshore and chosen to use their IRAs to purchase additional income-producing property in the same community where they now live. Nicaragua, Belize, Panama, Guatemala, the Bahamas, Argentina, and Chile are just a few of the countries where our IRA investors own rental real estate, often getting a rate of return that is out-performing the US stock market indices.
According to the Association of Americans Resident Overseas, over 6.3 million Americans live outside the US and its territories. This includes a wide range of people, some employed, but many retired. It is this group of retirees that is growing the fastest. The 77 million baby boomers have begun to retire and are changing everything. In 2010, 11% of the US population was over 65, but by 2030 it will peak at 18%.
It’s no wonder so many of those retirees, and even younger investors, are looking to purchase real estate that will build equity and cash flow within their IRAs. For example, a recent IRA client and his spouse purchased a Ambergris Caye Belize condos for sale in an exclusive resort on an island of Belize. Once purchased, the operation, maintenance, and rental program was turned over to the facilities operator. All the expenses, such as taxes and insurance, are paid by the couple’s IRAs, and their net revenues are deposited to the accounts each month. This client estimates his cash flow at 9% of his invested amount, and as demand grows, both the rental revenue and property appreciation also rises.
The amount of building and infrastructure growth in these developing counties can also be an avenue for retirement investors. Your IRA can purchase shares not just in publically traded companies, but in private ones as well. That hotel or large development project may have the need for outside investors, and based on your due diligence and risk tolerance, these types of investment options may be worth adding to your portfolio as well.
Agricultural and resource investing continues to thrive – increasing now as the world demand for food continues to rise. Leased farmland, Belize hotel investments, coffee plantations, mango and avocado plantations, coconut trees, hardwood timber, and fish farms are all choices that can be accessed through your self-directed IRA.
If you are reading this article, you are already thinking differently than most people. In order to retire well, you should also challenge the way you think about your retirement. Your retirement funds should be working for you. It is only through self-direction that you can truly unlock the power of your IRA and choose any investment that the IRS does not prohibit. You will be surprised at your choices.
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Article by: Glen Mather, founder and president of NuView IRA