At some point, you’re going to retire and you may be thinking that investing may be part of your retirement plan. But what do you invest in? There are so many ways to invest your money. While most investments are made with the same end in mind, the main difference between each investment type are the strategies and the level or risk involved. Trust deed investing has relatively low risk and a good chance of reward.
Here are the benefits of using your IRA to invest in trust deeds according to Accuplan:
- Secured By Tangible Property – Trust Deed investments are secured by a tangible property you can go and look at, “kick the foundation” and decide whether or not you would like to own if you have to foreclose.
- Safety – Low Risk As long as there is value in the property, your investment is secure. We never loan more that 65% of the value of the property, so you are assured that if it is necessary to foreclose, the property will be able to be sold to recoup the investment and make a profit.
- Great Returns – Depending on the type of deal, the borrower and the property, returns of 9-18% are typical. Past performance is no guarantee of future performance, and your returns may vary.
- Familiarity Many people are familiar with real estate investing because real estate ownership is so common. Stock transactions which produce the kinds of returns one can find in trust deeds often involve derivatives and complex financial instruments most people just don’t understand, or want to spend the time researching.
When thinking about your retirement plan and investing in trust deeds, remember that the outright purchase of an investment property is not required. Some investors prefer to buy a portion of the deed. When trust deed investing in expensive markets such as California, this can be a great option. Trust deed investing is flexible which makes it feasible for borrowers who use hard money loans for their real estate investments. When working with a reliable lender who values communication and flexibility, trust deed investing is a great way to maximize your investment dollars.
According to Life to Success, trust deeds can earn up to 10 percent, “Trust deed investors who invest for their retirement agree that it is the best investment they can make, because a trust deed can earn 10%, which is as much as 5 times more retirement income compared to other investing methods such as a savings account which on average pays between 2-4%. Furthermore, investing in trust deeds for your retirement is safer than running the risk of being stuck in a low yielding mutual fund, or a bad stock.”
Real estate investment is an excellent way to build wealth and equity while also diversifying your portfolio. However, not every investor wants to go through the hassle of buying and managing investment properties. Luckily, traditional real estate investing is not the only route to take. You can invest in trust deeds with a self-directed IRA and trust deed investing is a widely used for of real estate investment that provides flexibility and security while you are thinking about your retirement plan.