Whether you call it a self-directed IRA account or a checkbook IRA account, what is means to you is options. As in, getting a bigger return on your retirement account dollars by investing in real estate.
But, for some, the more options that are presented, the more confusing it becomes. However, it shouldn't be. Like any other investment account, all you have to do is ask yourself a series of questions to determine your real estate investment strategy.
3 Questions to Ask Yourself Before Delving into Your Self-Directed IRA Account
Investor Personality: As in, what type of investor are you? Do you like to take chances, are you super conservative. Or, do you fall somewhere in between the two. Knowing your investor personality will guide in selecting the most appropriate investment that won't cause you constant worry and stress.
How Far Off is Retirement? Becoming crystal clear about this question will help you decide what type of real estate deals you want to invest your checkbook IRA funds in. You might consider investing in properties to rent, for example, instead of going for the quicker return of buying, renovating and flipping properties.
Retirement Income Needs: Most focus on the big number when they think about their self-directed IRA accounts. Eg, how much do I have/want to have in there? It's important to break this down into monthly amounts. You should run projects for 20, 25 and 30 years. As in, will how much do I have to have in my account to sustain an income of $5,000/month over 20, 25 or 30 years (maybe even more).
These are just three of the questions you will need to ask and answer before settling on an investment strategy for your checkbook IRA account. Albeit, they are three of the most important.
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For more information on self directed ira investing visit the IRA LLC Partner.
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