The U.S. housing market is continuing to grow stronger in 2014 – demand is surging, construction activity is rising and foreclosures are falling. Real estate is becoming a targeted area of investment as the industry continues to see an increase in homes for sale. Increases in homes for sale and building permits are encouraging for homeowners, renters and investors.
U.S. cities with a steady employment rate and potential for job growth, a need for entry-level rental housing, and potential for long-term property appreciation are ideal characteristics for a successful investment. According to Forbes, Virginia leads the 2013 list of the best states for business.
A closer look at Virginia
Virginia is among the state economic leaders because of its state-of-the-art public school developments, occupied commercial real estate properties and continued job growth. For investors looking to purchase income properties, these are a few key qualifications to consider when investing.
Real estate investing experts say adding properties to your portfolio from cities like Virginia’s Newport News can provide an outstanding diversification investment asset, along with an increased layer of protection and reduced risk.
Newport News is one of the most stable, viable and emerging markets in the country, located in Hampton Roads. The Brookings Institution ranks Hampton Roads’ economy as the nation’s second best performing economy throughout the recession – unemployment rates have dropped, the public school system is booming, businesses are occupying commercial real estate properties and Newport News is home to one of the world’s strongest military bases.
As several cities around the country are experiencing a growing economy, investors shouldn’t limit their income-producing properties to a specific market or region. Another key consideration before investing in real estate is the opportunity to diversify retirement savings by providing access to real estate, a proven alternative asset class.
Experts recommend people talk to real estate investment firms to discuss utilizing retirement savings, such as an IRA account, to make the investment easy and affordable. In addition to the expert knowledge of an investment company, investors can receive management tools to aid the property transaction and ongoing management. These experts and tools are in place to help make real estate investing simple and straightforward for investors.
How to invest in real estate through an IRA
When investing in a flourishing U.S. market, a hard asset, such as real estate, can prove to be an easy and affordable alternative that investors can rely on for additional retirement savings.
There are a few ways to invest in real estate, one of which is through a self-directed Individual Retirement Arrangement (IRA) account. A self-directed IRA account is an IRA that allows the account owner to direct the account trustee to make a broader range of investments than other types of IRAs. Internal Revenue Service (IRS) regulations require that either a qualified trustee, or custodian, hold the IRA assets on behalf of the IRA owner. The custodian will maintain the assets and all transactions pertaining to them on behalf of the self-directed IRA owner for the life of the IRA account.
Experts have found this type of investing is becoming popular among individuals with IRA accounts, as it offers a chance to diversify retirement portfolios through hard assets, therefore mitigating risk. Self-directed IRA real estate investing is also attractive because of the required pre-approved non-recourse loan for all property investments. Non-recourse loans are based on the value of the property, not the credit worthiness of the investor.