The Pros and Cons of Using Real Estate in Your Retirement Plan | Morris Invest
📞 Ready to buy your first fully done for you rental property? Book a free call with us: https://morrisinvest.com Alternative strategies for retirement are growing in popularity, and for good reason. More and more Americans are realizing that the traditional way to save for retirement is outdated, broken, and ineffective. Buying real estate investments is a great way to exponentially grow your wealth and save for retirement. To help you determine if buying rental properties in a retirement account is right for you, we’re going to run through some of the pros and cons, and the things you need to consider as you’re building out your retirement plan. ❓Ask me a 30-second question at https://morrisinvest.com/clayton 📺 Watch Next: How to Create Your Personalized Path to Financial Freedom: https://bit.ly/392kAsB 🏠 What's Your Freedom Number? Download our free PDF to help you determine how many rental properties you would need to achieve financial freedom: https://morrisinvest.com/freedom 💵 Ready to get your finances in order? Download the FREE 90-Day Financial Empowerment Bootcamp: https://morrisinvest.com/bootcamp 🎓 Want to learn more about creating your individualized plan to wealth with a proven system? Join us in Financial Freedom Academy: https://financialfreedomacademy.com 👨🏻💻 Sign Up for My Webinar: https://morrisinvest.com/webinar ----------------- The pros: -Buying real estate in a tax favored account offers more freedom and more control than traditional retirement accounts can provide. Using a plan like a self-directed IRA allows you to buy a wide variety of asset types, including real estate investments. -Certain accounts allow you to create tax-free growth on your real estate investments. If you’re using a tax-advantaged account such as a self-directed IRA to buy rental properties, all of the income you earn inside that account grows tax free. -Real estate investments offer a higher level of security than traditional investment types. A stock-based retirement plan leaves your funds vulnerable to the ups and downs of the stock market. But when you have rental properties in your retirement plan, you own a tangible asset that will only appreciate in value and is protected from the volatility of the market. -You have the potential to earn higher returns when you invest in real estate than you would via other retirement strategies. Real estate is the number one way to build wealth, so combining its powers with the tax-shelter of a retirement plan, the potential is unmatched. The cons: -Buying real estate for your retirement means putting off the benefits of cash flow that rental real estate provides. -Tax-advantaged accounts must follow strict rules and regulations. -Buying real estate inside a retirement account takes away your ability to be hands-on with your property. If you have questions about building out a retirement plan with rental properties, come over to our website and schedule a free 30-minute call with our team at https://morrisinvest.com. Our portfolio managers are experts in the nuances of buying real estate inside of a self-directed IRA, and we’d be happy to help you develop an investing plan that works for you. ----------------- #claytonmorris #morrisinvest #realestate About Clayton Morris: As a financial news host and real estate investor, Clayton Morris believes that everyone has the right and the ability to achieve financial freedom – and works to help others to know how to do so. Clayton founded Morris Invest that builds portfolios for their clients and guides them through the buying process, ensuring cash-flowing investments. Website- https://morrisinvest.com/ LinkedIn - https://www.linkedin.com/company/morris-invest/ Twitter - https://twitter.com/Morris__Invest Facebook - https://www.facebook.com/MorrisInvest Podcast - https://podcasts.apple.com/us/podcast/investing-in-real-estate-with-clayton-morris-investing/id1115024566 ----------------- DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments. AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning, at NO additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact my opinion. We recommend them because they are helpful and useful, not because of the small commissions we make if you decide to use their services. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.
The Pros and Cons of Using Real Estate in Your Retirement Plan | Morris Invest
Pros and Cons of Using Real Estate in Your Retirement Plan
In this section, the speaker discusses the pros and cons of using real estate in your retirement plan. They highlight the benefits of buying real estate investments in a tax-favored account, such as more freedom and control over investment choices, tax-free growth on real estate investments, higher security compared to traditional investments, and potential for higher returns. However, they also mention some drawbacks, including limited access to cash flow from rental properties, strict rules and regulations for tax-advantaged accounts, and limitations on being hands-on with managing the property.
Pros of Using Real Estate in Your Retirement Plan
- Buying real estate in a tax-favored account offers more freedom and control over investment choices compared to traditional retirement accounts.
- Certain accounts allow for tax-free growth on real estate investments made within them.
- Real estate investments offer a higher level of security than traditional investment types.
- There is potential to earn higher returns when investing in real estate compared to other retirement strategies.
Cons of Using Real Estate in Your Retirement Plan
- Buying real estate for your retirement means putting off the benefits of cash flow from rental properties.
- Tax advantage accounts have strict rules and regulations that must be followed.
- Investing in real estate inside a retirement account limits your ability to be hands-on with managing the property.
Timestamps are provided for each bullet point based on the corresponding part of the transcript.
Understanding the Limitations of a Self-Directed IRA
This section discusses the limitations and lack of control associated with a self-directed IRA when it comes to property investments.
Lack of Control with Sweat Equity
- The IRS prohibits "Sweat Equity," meaning you are not allowed to do any work on your property within a self-directed IRA.
- You cannot personally fix or improve your rental property; instead, your retirement account must hire and pay someone to do these repairs.
- The transaction for hiring someone must be facilitated by the custodian of your retirement account.
Considerations for DIY Investors
- If you prefer being actively involved in managing and improving your properties, buying rental properties within a retirement account may not be suitable for you.
- It is important to reconsider this strategy if you enjoy doing the work yourself.
Seeking Expert Advice
- If you have questions about building a retirement plan with rental properties, visit the Morris Invest website and schedule a free 30-minute call with their team.
- Their portfolio managers are experts in buying real estate within self-directed IRAs and can help develop an individualized investing plan.
Pros and Cons of Rental Properties as Retirement Strategy
- Every investing strategy has its pros and cons, including using rental properties as part of a retirement plan.
- It is crucial to consider these factors before deciding on this approach, as there is no one-size-fits-all solution in real estate investing.