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Signs of a Bottom – Now May be the Right Time to Use a Self-Directed IRA to buy real estate

Sales of vacation rental properties fell 56% between 2006 and 2010, but climbed 7% in 2011 to 502,000, according to the most recent survey by the National Association of Realtors, a trade association. Yet prices remain soft; according to the NAR, the median price on vacation rental homes dropped more than 19% in 2011 to $121,300.

Realtors say some buyers—those who plan to keep a home in the family for future generations through the use of Self Directed IRAs —are snapping up homes now, even though prices might have further to drop. The bottom for vacation rental home prices will be clear only in retrospect, but there are signs one might be forming. Some markets in California already are seeing price increases, while hard-hit markets like Phoenix and Scottsdale, Ariz., have seen slowing declines.

From a long-term investment horizon, vacation rental homes will do very well, as expected price appreciation begins in many markets. However the shorter-term outlook for vacation homes is murkier. Moody’s Analytics forecasts overall U.S. home prices will drop next year—by a scant 0.8%—but the nationwide figures mask sharp geographical divides in popular second-home markets.

Purchasing vacation rental properties with a Self Directed IRA is a tax efficient way to accumulate rental income and capture price appreciation TAX FREE!

For more information about using a self-directed IRA LLC with checkbook control or a real estate IRA to purchase real estate please contact an IRA Expert at 800-472-0646 or visit www.irafinancialgroup.com.

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Posted in IRA Financial Group, Self-Directed IRA

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