Use your IRA to Purchase your Retirement Home

by Mesquite Realty on November 23, 2009

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What if you could purchase your retirement home now, while prices are low using your IRA without penalty… well you can!

This option is not talked about often because most traditional IRA brokers make money on your money. When you take your money out to purchase a home, they have less of your money to manage.

A real estate IRA could work for you… if you are a few years from retirement and would like to purchase a home now, while prices are low. Then you could lease it out and the rental income would go back into your real estate IRA. Then in a few years you could work on selling your home and when that happened you would be already to move into your retirement home, and it would be all paid for.

Most people believe that you can not hold real estate in your IRA and this is not true.  You can own condos, homes, commercial properties etc. along with your stocks and mutual funds. You may not buy or hold your your own residence in your IRA or any property that you use. It must be an investment. After you retire and are over 59½ years old you direct your IRA to turn the home over to you as a disbursment at current market value.

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The purchase needs to be and “arms length” transaction.

In this case you would direct your IRA trustee to purchase the home in the name of the IRA  with you as the beneficiary. All contracts, earnest monies, deposits go to and from the trustee while it is owned by your IRA.

To setup an IRA for real estate generally costs a few hundred dollars and then another couple hundred dollars a year to maintain. The process is fairly simple and there are some Pros and Cons to purchasing a home with your Real Estate IRA. If you would like more info please CONTACT US.

Find a retirement home to purchase in Mesquite Nevada

This article was written by the Mesquite Real Estate Team from Bowler Realty. Bowler Realty is a Real Estate Company in Mesquite Nevada. Bowler Realty recommends checking out any and all tax implications related to your IRA with your tax professional.

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