Retirees Are Becoming Significant Real Estate Investors

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Real Estate Marketing Insider comments on the increasing numbers of retired Americans who are choosing to invest in real estate.

REMI's Tobias Nergarden issued some observations about the increasing numbers of properties being chosen as investment opportunities by retirees today, and his opinion is that this will help home sellers because more investment means that real estate advertising services and real estate agents can take advantage of rising prices and demand for properties.

The Colorado Springs Business Journal reports that a larger number of people are choosing to invest their retirement savings into homes and other properties. With low current property prices and a rising housing market, it is possible for people with enough capital to buy a property and quickly resell it for a higher price. What is surprising in this report is that many of these investors are using money from their IRA’s in order to get the necessary capital. This requires finding a bank, such as the Equity Trust Co., that will allow personal decisions regarding how this retirement money is invested. This type of investment does have risks, including potential tax issues that, if not managed properly, can invite the wrath of the Internal Revenue Service.

An IRA is an Individual Retirement Account, a way for people to save for retirement that also provides several tax advantages. There are several different versions of the IRA, including the Roth IRA, which involves funds that have already been taxed, and the Traditional IRA, which involves tax-deductible contributions. When this money is withdrawn upon retirement, it is considered income and is then taxed. While in the IRA, the money can be directed by a trust or by a manager who is given broad instructions in terms of investments.

The Equity Trust Co. is mainly known as the largest organization that allows self-directed IRA’s in the United States. Equity Trust was originally known as Mid Ohio Securities and has clients in each state throughout the U.S. For a long time, they were the only organization that allowed a self-directed IRA, but in recent years, they have been joined by several competitors.

The Internal Revenue Service is the portion of the U.S. Treasury Department that is in charge of collecting taxes. The IRS is headquartered in Washington, D.C., and has several processing centers around the country. Although there was a wartime income tax passed during the U.S. Civil War, it was repealed seven years later. A permanent income tax was instituted in the United States in 1913 due to the 16th Amendment.

Real Estate Marketing Insider today commented on the recent surge of real estate investors who are using money from their IRA’s to purchase and flip houses.

About Real Estate Marketing Insider:
Real Estate Marketing Insider is a publication for real estate professionals based out of La Jolla, California. The primary goal of REMI is to provide these professionals with tips, analysis, and strategies.

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