Checkbook IRA: Establish a Real Estate Investment Strategy
Checkbook IRA accounts, also called self-directed IRA accounts, provide many options for account holders to increase their portfolio value through investing in real estate. As real estate investing is the number one way to make money in the U.S., it’s no wonder that many want to capitalize on this.
For all of the opportunity that the checkbook IRA presents, it can be a confusing, discombobulating journey for many. However, asking and answering a few questions can easily help you determine a sound investment strategy for which to use your self-direct IRA account funds.
Self-Directed IRAs: 3 Real Estate Investment Strategy Questions to Ask
Investor Personality: As in, what type of investor are you? Do you like to take chances, are you super conservative. Or, do you fall somewhere in between the two. Knowing your investor personality will guide in selecting the most appropriate investment that won’t cause you constant worry and stress.
How many years before I have before retirement? Answering this question will help you determine how you want to go about investing your self-directed IRA account funds. Flipping properties for example is a quicker payoff than buying and holding (eg, renting out) properties.
Retirement Income Needs: Most focus on the big number when they think about their self-directed IRA accounts. Eg, how much do I have/want to have in there? It’s important to break this down into monthly amounts. You should run projects for 20, 25 and 30 years. As in, will how much do I have to have in my account to sustain an income of $5,000/month over 20, 25 or 30 years (maybe even more).
These are just three of the questions you will need to ask and answer before settling on an investment strategy for your checkbook IRA account. Albeit, they are three of the most important.
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