A self directed real estate 401k investment alone can provide the diversification you need in your retirement funds. You just have to learn and acknowledge the different types of investments available for you. The most common practice most people do when they invest their retirement savings in real estate is purchasing a leasehold property and earn from the monthly rent they could collect from it.
For those individuals who know how real estate investment works, the Solo 401k self directed plan is the perfect kind of retirement plan for them. This plan is not just designed for non-traditional investment experts but this plan is also created for those individuals who believe that their retirement savings can achieve the stability and diversification every investor would want to achieve with their hard earned money.
The Real Estate industry has a wide range of investment opportunities. Aside from purchasing houses and creating the ability to earn from the monthly rentals that a person or a family will pay them when they live there – there are far more other types of real estate investment options that you can part take in.
The self directed real estate 401k could also be used in different types of real estate investments.
• Commercial real estate – Small office buildings with individual offices that you can lease out to small business owners and companies.
• Retail real estate – Investing in retail storefronts, strip mall, etc. On top of the rental fee, the investor can also earn a percentage of the tenant’s generated sale depending on the agreement.
• Industrial real estate – Special purpose real estate investment such as carwash, storage units, etc. Payment from the temporary use of the space by the tenant could generate income to the investor’s self directed 401k real estate investments.
• Mixed-use real estate – Combination of those mentioned above types of real estate investments.
• Real estate groups – These are organizations that develop and buy properties. The investor’s self directed real estate 401k can own part of the property without the need to manage it directly. Rental from the unit produces income to the investor. A percentage of the investors’ rent proceeds will go to the organization in exchange for the maintenance, works, and finding of tenants. In case of vacancies, the group will pool a portion of investors’ rent to pay for the mortgage payments.