Once you switch from a traditional IRA that is only investing in the stock market to a self directed IRA your investment options are nearly limitless. But some choices are more popular than others. So we compiled a list of the top 5 asset choices our clients make with their self directed IRA.
1) Turn Key Rental Properties
Your IRA can buy a rental property, where all rent is paid back into the IRA. This is a very popular and incredible growth option. All rent is paid into the IRA account and all expenses are paid out of the IRA account. Many clients are seeing cap rates in the 10% range.
2) Tax Liens
With high government mandated interest rates backed by real estate tax lien investing is a very popular choice. Some of the tax liens will allow you to foreclose immediately increasing the likelyhood that you will get a property for a deep discount. Many of our clients that are investing in tax liens with their self directed IRA accounts are seeing a 14% year over year increase. An amazing return on investment.
With a rising global population, land is becoming a precious commodity. Your IRA can secure an investment in raw land and enjoy the tax-advantaged benefits that accompany your account type as time goes on. Raw land can be purchased and held until the time is right to sell or build. Land bought with an IRA can be purchased and leased for farm land, development, or for oil or cell towers.
Your IRA can provide loans for friends, businesses, or your favorite non-profit associations. If someone you know is paying 20% interest on a credit card, your IRA can loan them the money for 15%. As long as a person is not a direct lineal descendent (or yourself), your IRA can loan them money. Many of our clients try their hand at hard money lending using their self directed IRA account. You can invest in the causes and people that you believe in – all while enjoying tax benefits!
5) Private Stock
Find the next Microsoft, Apple, or Uber ahead of the crowd, and your IRA can buy shares in the company before they go public. Whether it be nanotechnology, biotechnology, or your next door neighbor’s fledgling cookie business, your IRA can get in before the rest of the world knows the true value of the start-up company you’ve discovered.