A recent study from Trulia revealed that the number of renters is likely to increase in the years to come. The financial crisis made homeownership out of reach for many Americans, due to tightening credit, high unemployment rate, and stagnant pay rate. Millennial are also slower to settle down with their first homes than previous generations.
The study also showed that certain groups are affected more than others. Affluent Hispanic Millennial men were named the group that was affected the most. From 2006 to 2014, the percentage of renters among this group had nearly doubled, from 32% to 63%.
The statistics show that in years to come, there is still a high demand for rental housing. This makes real estate a promising investment, whether direct investment in rental properties or indirect investment in private lending through trust deeds and mortgage notes.
Apart from recent trends, real estate has always been a good option to diversify a portfolio. The long-term, secure nature of real estate makes it a good option for retirement planning. Unfortunately, most investors can only venture into real estate with their personal funds. Most traditional retirement accounts have restrictions on investment choices.
With the rising popularity of self-directed retirement plans, however, owning real estate within a tax-advantaged account is now possible. Sense Financial recommends real estate investors to look into self-directed options, such as the Checkbook IRA LLC and self-directed Solo 401k plan.
These options allow plan owners to take control of the retirement funds and bypass custodial approval. Contrary to popular beliefs, the IRS does not prohibit real estate investments within retirement plans. Traditional custodial plans, however, often put restrictions on the plan policy to limit investment options to their in-house funds and other investment products. Other custodians are reluctant to manage a real estate portfolio
With a self-directed IRA or Solo 401k, however, investors can use their personal knowledge and expertise to invest in real estate, among other options. Many investors choose to take advantage of the tax-free non-recourse financing available with the Solo 401k real estate plan to purchase properties. Other may take the passive route of investing in trust deeds or mortgage notes.
Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients
To learn more about Solo 401k, please visit sensefinancial.com.
