My Florida Home Builder

Self-directed IRA accounts, also known as checkbook IRA accounts, provide many options for investors. If you want to maximize your retirement account returns, investing in real estate is one of the best ways to go about it.

Real estate investing is a very diversified field, which can stymie some investors when it comes to determining how to invest their money. It needn’t be at all, however. Asking yourself a few questions will help you to quickly put together a real estate investment strategy for your self-directed IRA account funds.

Self-Directed IRAs: 3 Real Estate Investment Strategy Questions to Ask

What type of investor am I? Are you a risk taker, very conservative, somewhere in the middle? Before tapping your self-direct IRA funds to invest in real estate, you need to know what your risk compass is. This will guide you in selecting which type of real estate investment you want to make.

Is retirement looming, or in the distance? This question is designed to highlight which options you can safely take advantage of with your self-directed IRA account funds. Like any other type of investment, some real estate options are riskier than others. The closer retirement is, the less time you have to recover from mistakes. So, you may want to consider safer options like buying and holding property (eg, for rental income).

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).

There are quite a few more lessons to add to this list. But answering these three will go a long way towards helping you to formulate an investment strategy for your self-directed IRA account monies.