Retirement accounts increasingly used to invest in real estate

TRD New York /
Feb.February 04, 2013 01:30 PM

Self-directed IRAs are increasingly being used to buy real estate as an investment, the Wall Street Journal reported, affording the retired higher returns than the traditional investments, such as stocks and bonds, that retirement funds generally make. The motivation? Self-directed IRAs afford the flexibility to invest in more diverse assets, while maintaining the favorable tax treatment that retirement accounts are afforded.

“I had built that account for retirement, and when March 2009 came along I watched it lose 40 percent of its value,” Gordon Berger, a retired professor who uses a self-directed IRA to buy distressed homes and apartment buildings, told the Journal. “I decided I didn’t want to leave myself vulnerable by having all my retirement in stocks and bonds.”

New Direction, a Colo.-based “custodian of self-directed IRAs,” said that in the past year real estate has made up about 45 percent of new investments, up from about a third in the past, per the Journal.

However, investing in real estate is never entirely simple: new landlords have all the same worries that any other real estate owner would, the Journal said. [WSJ] –Guelda Voien

Related Articles

(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Finger and Finger principal Kenneth Finger and landlord activist Jeff Hanley with Westchester (Credit: iStock)

Westchester group lobs its own constitutional challenge to New York’s rent law

Kings Plaza Shopping Center and JPMorgan's Jamie Dimon 

Macerich lands nearly $500M refi for Kings Plaza Shopping Center

WeWork's Artie Minson and Managed by Q's Dan Teran 

WeWork in talks to sell off Managed by Q to free up some cash

(Credit: iStock)

What you need to know about investing in healthcare real estate

Square Mile Capital's Craig Solomon and Hope Street Capital's Sha Dinour with renderings of 550 Clinton Avenue in Brooklyn (Credit: Getty Images and Morris Adjmi Architects)

Square Mile Capital provides $180M loan for Brooklyn tower