The 4 Benefits of a Real Estate IRA
Real estate IRAs are self-directed individual retirement accounts (known as SDIRAs) that you can use to hold rental property. Since 2008 First Western Federal Savings Bank in South Dakota has used our famous non-recourse loans to help people acquire rental property, so we’re familiar with the benefits. If you’re new to real estate IRAs, read on to learn more about how this unique SIDRA type can benefit you.
A diverse portfolio — that is, holding a multitude of financial assets — is essential to good financial health. A real estate IRA makes for a valuable asset in a diverse portfolio, as this asset is separate from any stock or bond holdings. If the market crashes, your real estate IRA is protected. Historically, real estate’s value has increased over time, making it a safe long-term investment. Real estate’s status as an appreciating asset compliments an IRA’s long-term investment horizon. Though you cannot use your SDIRA to buy property you or your family can live on, you can lease out your property to tenants and collect rent as part of your real estate IRA investment strategy. This allows you to earn a passive income on top of the value of the land itself. Perhaps the most notable benefit of a real estate IRA is that you are not personally liable for any losses. When setting up a SIDRA and purchasing property, you provide collateral in place of an offer. When there are losses, your collateral takes the place of your assets, so you’re shielded from substantial loss. 
Real Estate IRAs Help You Diversify Your Portfolio
Real Estate Appreciates Over Time
Your Investment Can Provide Income
You Are Not Personally Liable
A real estate IRA from First Western Federal Savings Bank allows you to diversify your financial portfolio with appreciating assets that provide a passive income. And, if there are losses, you’re not personally liable. Contact First Western today to learn how our non-recourse loan options can help you become a property owner.