Saving for retirement by investing in real estate

Investing in real estate is one of the best ways to accumulate wealth and create long-term financial stability. For most people, real estate investing involves buying income-producing properties. These can be either residential or commercial properties. Having multiple revenue streams is always a good idea and income-producing properties are a great way to have supplemental income. With this said, another option available to you is called “Self-Directed IRA” (SDIRA).

What is a SDIRA?

A SDIRA is a unique retirement account that allows an investor to pursue alternative investments, such as real estate. Essentially, this allows an investor to explore a creative way to save for the future. Depending on the type of account used, there are potentially many tax advantages associated with a SDIRA. The most common individual plans are a Traditional or Roth IRA.

With a Self-Directed Traditional IRA you don’t pay taxes on contributions or earnings until you retire and start taking distributions. With a Self-Directed Roth IRA, however, you pay taxes on your earnings as you go. Therefore, the Self-Directed Roth IRA allows your earnings to grow tax-free, should certain conditions be met.

For those that are self-employed or a business owner, other options exist such as SEP IRA’s, Simple IRA’s, or Individual 401(k)’s. These types of retirements generally have higher contribution limits and additional tax advantages.

Benefits of using a SDIRA to invest in real estate

  • Increased flexibility & potential for investment growth: With the freedom to invest in virtually any asset, a SDIRA provides more flexibility in the risk that you take on. This can lead to more potential for a higher return on your investment.
  • Increased investment in an area of familiarity: If you are a seasoned real estate investor, a SDIRA allows you to invest in an area of comfort & expertise.
  • Protection against economic fluctuations: Investing in alternative assets like real estate allow you to diversify your portfolio against market fluctuations.
  • Growth savings in a tax-advantaged account: A SDIRA that allows for tax-deferred or tax-free growth can significantly affect future wealth positively.


SDIRA’s have become more popular in the South Florida market in recent years. A large reason for this is the overall bullish outlook for the Florida real estate market. The Sunshine State continues to consistently be one of the top destination states for Americans looking to relocate. As always, it is best to consult with your financial advisor and/or accountant prior to embarking on a SDIRA.

Are you thinking about buying real estate in the South Florida market? Contact Live South Florida Realty, Inc. today! You will be glad that you did.


REALTOR® with Live South Florida Realty, Inc.