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Entrust New Direction IRA Reports Self-Directed IRAs Bolster Sagging Real Estate Market

August 19, 2011

Entrust New Direction IRA, Inc, a self-directed retirement plan services company, reports an increase in real estate purchases within self-directed retirement accounts. Bill Humphrey, principal of Entrust New Direction IRA, said, “This economic climate could be an investors dream, but many investors are coming from outside of the United States. Thankfully, we’ve seen a big increase in American real estate investors take control of their retirement savings and choose their own investment strategy with real estate, which can help the economy and the country.”

(PRWEB) August 18, 2011

One well-known and troubling economic consequence of the current real estate crisis is the shortage of qualified buyers for the glut of available properties. Entrust New Direction IRA, Inc, a self-directed retirement plan services company, reports an increase in real estate purchases within self-directed retirement accounts. Bill Humphrey, principal of Entrust New Direction IRA, said, “This economic climate could be an investors dream, but many investors are coming from outside of the United States. Thankfully, we’ve seen a big increase in American real estate investors take control of their retirement savings and choose their own investment strategy with real estate, which can help the economy and the country.”

According to RealtyTrac, the amount of foreclosure filings in the US totaled to more than 219,000 in April, 2011 alone. While the marketplace is becoming a homeowners’ nightmare, it is also, in many ways, a real estate investor’s dream come true. Unfortunately, a lot of these investors are coming from outside of the United States. According to an article by Julie Schmit of USA Today, “Foreign buyers are being enticed by low U.S. home prices, down 30% nationwide since peaking in 2006, and the weakened dollar, which makes their money go further.” So, as Americans, we find ourselves in a situation in which our inability to participate in our own economic recovery is opening the door for foreign investment.

However, there is an emerging trend in retirement investing that may give a much-needed boost to the economy. A segment of retirement investors are investing in their retirement dreams through purchase and repair of distressed homes. This strategy has potential to revitalize both hard-hit retirement savings and foreclosure-filled neighborhoods. The change is fueled by a growing number of investors looking for alternatives to traditional Wall Street investments and instead seeking opportunity in Main Street America. These investors are using an investment tool referred to as the self-directed IRA to take control of their retirement savings and choose their own investment strategy.

Since the inception of IRAs, the IRS has allowed a wide variety of investments, including real estate, in individual retirement accounts (IRAs). Up to this point, stocks and bonds have been the most common assets purchased for retirement accounts. When one considers that the banks and brokerage firms that typically hold IRAs make commissions on the transaction of stocks and bonds, it becomes clear how these investments have come to dominate the IRA world. When the market has been handled well, these investments have produced a good return for its clients. However, market volatility over the past few years has inspired many investors to look for more investment options. IRS rules for individual retirement accounts allow for broad diversification that include such assets as precious metals, private equity, notes, and real estate.

This is the gap into which the self-directed retirement investor steps. As more and more people become aware of their ability to have their retirement funds invested in real estate, the supply of potential money to purchase real estate has increased. An IRA purchase of real estate produces two major benefits. First, the retirement account acquires an asset capable of providing an excellent return on investment. Whether a property is the only asset or just one of many, it can increase the worth of the account via rental income and/or appreciation. Second, reducing the supply of available real estate stabilizes that market which is a significant contributor to the nation’s economy. As Dr. Lawrence Yun, Chief Economist for the National Association of Realtors states, “Absorption of inventory is the key to price improvement, …”

The net effect is that the IRA makes money, and it contributes to economic recovery. Could the self-directed IRA as an investment tool single-handedly revive a booming real estate market? Likely no, but self-directed IRAs do possess an under-utilized power for achieving significant positive change in our country.

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For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2011/8/prweb8651258.htm


Source: prweb



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