Did you know that you can invest in land to build income for retirement? Popular real estate investments include commercial and residential property, rehab-and-flips, and rentals. However, investments in land itself offer some pretty unique opportunities that can potentially build substantial wealth in your portfolio.
Self-directed retirement plans are used by individuals who prefer to control their own retirement funds and choose their own investments. These accounts use alternative assets that exceed the Wall Street-norm of typical stocks, bonds and mutual funds. Account owners are able to invest in things like real estate, businesses, private equity, futures and forex, gold—and just about any other thing you can imagine, excluding life insurance and collectibles as defined by the IRS.
And, you guessed it—land investments fall neatly into the alternative asset category. Many individuals capitalize on their own knowledge and expertise in this realm to build wealth for retirement. Land offers great potential for those who understand what is involved in the process and the purpose of using it as an investment to reach their goals.
There are several different ways you can invest in land.
- Farm land
- Oil and mineral rights
- Land being speculated for development
- Crowdfunding opportunities
- —and so much more!
Investing in land has garnered many an individual the income they desire. But, in order to achieve success, you’ve got to be fairly clever when making your choices. Don’t become a victim of fraud by investing in an unusable, invaluable patch of what was promoted as the elusive Never-Never Land. If it sounds like a fairy tale, then it probably is!
So, just as with any investment, performing due diligence for assets in your IRA is paramount. Doing so helps to ensure the asset is viable. It’s also critical that you learn about harvesting, drilling, building, and other rules set forth by the governing agency of the location of your investment property. If you fail to comply with their guidelines, your IRA can find itself in some pretty hot water and your clever-clever land investment may very well end up in never-never land.
Using retirement funds to invest does not protect you from unexpected expenses, penalties for misusage of land, or even from taxation should your IRA operate outside IRS rules and regulations. In fact, your IRA will have to bear the burden of any expenses and can also lose its tax-sheltered status if it operates outside rules set forth by the IRS. To protect your investment make sure you’re well informed, that you deal with advisors (such as land groups, attorneys, CPAs, and realtors) who are reputable and understand how retirement funds can be used to invest in land.