With real estate prices depressed and a lot of wealth sitting in qualified plans, you may wonder how you can use that wealth to invest in real estate. In this article I offer considerations and strategies for using your IRA to position yourself in real estate for your future benefit.

People have taken advantage of their qualified plan deductible contributions – and often company matching contributions- to accumulate substantial savings. How can they use that money if they feel now is the time to invest in real estate?

If you want to use your employer-related qualified plan money, request your company to roll it over directly into to your own IRA tax free. Now decide how you want to invest or distribute that money. You can purchase real estate, but you’ll have to transfer your IRA money to a self-directed IRA.

You must avoid using your self-directed IRA for “prohibited transactions”. These prevent you from using your IRA account for “self-dealing”. As an example, you can’t use your IRA

* To buy stock or other assets from you or sell them to you,

* To lend to you or borrow from you, or

* To engage in transactions with certain related parties and/or family members.

So, in the case of real estate, you can only use it for your own benefit when you finally take an ‘in-kind’ distribution of the real estate in your IRA to yourself.

Tax considerations for real estate and deductible and Roth IRAs: Real estate is already a tax advantaged investment. Buying real estate for its rental income and appreciation carries all sorts of tax breaks. You get deductions against it rental income for the expenses of carrying the real estate. These include maintenance, mortgage interest payments, and depreciation. If deductions exceed your rental income, you can use the excess against your other income. Lastly, the sale of your real estate is subject to capital gains tax which is low for long term (greater than 1 year) holding periods.

Real estate in an IRA loses all these tax advantages. You’re left over with only IRA tax characteristics. For a deductible IRA, that includes deductible contributions to it, tax-deferred growth of its yearly earnings, but its distributions are subjected to income taxation. The latter can be quite severe. You also must make minimum retired distributions (MRDs) when you pass 701/2.

A Roth IRA gives you tax free yearly earnings and distributions come out tax free -and no MRDs ever. But the kicker is that whatever goes into it must be taxed as income – a very expensive proposition.

You can see that the IRA – of the self-direct kind or not – has an expensive income tax barrier – either coming out or going in. That means your investment gain must clearly overcome that high tax hurdle to make it worthwhile. Let’s consider some strategies.

Real estate strategies for the person with a lot of qualified plan money to invest If your money is tied up in your IRA (or qualified plan), and you want to take advantage of depressed real estate prices, here are three strategies to consider:

Real estate outside IRA strategy:

Use distributions from your traditional, deductible IRA to purchase and pay annual costs for real estate you buy outside you IRA. Since it’s outside your IRA, you can self-deal all you want. Use it as a rental or as a second home.

But arrange for its mortgage interests, depreciation, and other expenses to offset the income tax on your IRA distributions. That way you’ll keep all the future real estate tax advantages safe for your use.

Real estate inside your IRA – 2 strategies:

If you decide to buy real estate within your self-directed IRA, you can consider using a deductible IRA or a Roth IRA. But you lose all those real estate tax advantages.

So you’re looking for two big investment benefits of real estate to best use within an IRA:

* higher yearly earnings since these are either tax deferred (deductible IRA) or tax free (Roth IRA) and

* high appreciation – to more than offset the distribution income tax (deductible IRA) or the initial rollover income tax into a Roth IRA.

I would opt for using a Roth IRA rather than the deductible IRA. Although you’re getting hit by a lot of income tax to fund it, you’re presumably buying depressed real estate that’ll appreciate a lot over years. And all rental earning and future appreciation is never taxed. Lastly, you’ll never have to worry about making MRDs.

When you make an in-kind distribution of your real estate for your use, your basis in it will be equal to the value associated with the income tax you paid for it.

When it comes to real estate, the topic of the day is the downturn in the market, the number of people losing their homes, and how much this is going to hurt the economy. In the seventeen years I have been in the real estate business, I have witnessed every fluctuation the market has to offer. While it is true that many property owners are enduring trying times, rarely does the same happen to knowledgeable real estate investors.

There are those individuals who remain emotionally unattached and invest wisely in real estate. As a result, they live a very comfortable, if not lavish, lifestyle. Investing in real estate, especially during a downturn, can widen an investor’s opportunities and bring about lucrative returns. This is a truth. If you are thinking about becoming a real estate investor or have already made the decision to start, the following information is priceless.

Wanting to secure a comfortable financial future, most of us go to work every day hoping to build a nest egg. Since, it is common knowledge that real estate investors have the capacity to not only build a nest egg but also create a fortune, why aren’t more people joining the ranks of real estate multimillionaires? Why aren’t there more people fighting for a seat on the real estate bandwagon?

Well, the truth behind real estate investing is that it is a business and therefore, must be treated like one for it to prosper. Just like any other promising venture, investing in real estate requires a well-defined vision, a strategic plan, and an entrepreneurial mindset. Even with the overwhelming evidence revealing success, only a microscopic segment of the population is willing to take the risk, do the work and follow through. The rest simply watch and call those of us doing the work “Lucky”.

When I began my career in real estate, I didn’t have a plan. I didn’t invest. I didn’t even see past my next commission check. What kept me hanging on was a desire to live like the people I worked for, most of whom were real estate investors. Years later, I committed to create serious wealth through real estate. As soon as I mindfully committed to my goal, I began to make deals and more money than ever before.

By choice, I am not one of those investors who vacations six months out of the year. I work all the time meeting with clients, looking at properties and refining my strategy. Add to that a growing number of mentoring/coaching clients and my schedule is officially full. Nevertheless, I am continuously increasing my net worth as I am doing something that never feels like work.

Besides creating amazing wealth, being your own boss and having a place or two to call home, owning a real estate investing business has many other advantages. The following five play a special role for the novice investor.

1. Safe Investment

When we use a timeline to compare the real estate market to other investments, such as the stock market, it is easy to see that real estate continues to increase in value over time without any serious instability. Although, there is currently a housing crisis in various parts across the country, every indicator points out that what we are actually experiencing is a readjustment of highly inflated real estate prices. Just as prices may be dropping, in time they will undoubtedly increase. In contrast, the stock market has put investors through a dizzying rollercoaster ride made up of swift highs and abrupt lows throughout history. Regardless of what type of market we are in, it is clear that an investment in real estate guarantees a profit over time.

2. No Cash Necessary

For beginning real estate investors, sometimes the only investment they can make is their time. For every real estate investor, finding a lucrative deal is as good as striking oil. There are plenty of seasoned investors with money in their pockets itching to buy a piece of discounted property. Wholesalers often utilize this method. Therefore, if you are new to the game, consider finding a deal, tying it up and connecting with an investor who can take it off your hands…for a price, of course.

3. Almost Anyone Can Do It

Real estate is such a lucrative field that it opens doors to countless amateur investors everyday. There are how-to books and seminars at every turn teaching would-be investors a myriad of ways to make huge profits in the real estate market. While it is true that overnight success is practically unheard of, anybody with the heart, mind and determination can make it big in real estate. The keys are to continue learning and to monitor market conditions.

4. Leveraging Power

While novice investors can turn a quick profit by wholesaling their deals, Buy-and-Hold investors can yield a profit by borrowing against (leveraging) their properties. Typically, lenders will allow holders of owner-occupied property to borrow up to ninety-five percent of their property’s value and up to eighty-percent of non-owner occupied units. This means that you can either purchase property with a minimal out-of-pocket investment or acquire financing that will allow you to pull cash out of your property’s equity to use for future ventures.

5. Tax Breaks

The popular 1031 exchange and depreciation are just two of them. The United States government has set up multiple tax breaks favoring real estate investors. Owning real estate with the goal of making a profit allows you to deduct interest payments, repairs, and vacancies among other expenses when preparing your tax return. It is important to note that purchasing real estate makes economic sense; it should not be purchased solely for the tax benefits.

Ultimately, owning a real estate business is the way to achieve financial freedom regardless of economic conditions. Whether you quit your job and dive right in or you work at it in your spare time, you can make it happen. Worthwhile benefits are waiting faithfully for the taking.

Despite a recent slowdown, the U.S. real estate market continues to be a popular investment destination for foreign investors. Attracted by a desirable return on investment, many foreign nations continue to invest heavily in the U.S. residential and commercial real estate markets. In fact, in 2005, foreign investment in U.S. real estate reached 1.83 trillion.

To evaluate the impact of foreign investment on the U.S. real estate market, the National Association of Realtors (NAR) produced a 2006 report entitled ‘Foreign Investment in U.S. Real Estate: Current Trends and Historical Perspective.’ The report provides insights into the trends in foreign real estate investment, its impact on the U.S. economy, and the major countries that participate in U.S. real estate investment. Below are some highlights from the NAR report.

According to the U.S. Department of Commerce, the top seven countries that had significant holdings in U.S. real estate as of 2005 were:

Germany – 13 %
Latin America – 13 %
Australia – 11 %
Japan -10 %
United Kingdom – 10 %
Canada – 6 %
Netherlands – 6 %

The U.S. economy is wide open to foreign investors. Both investors and Americans significantly benefit from all this foreign investment. The NAR study estimates that without foreign investments in the securities market, the long-term lending rates would be four percentage points higher than the current rate, which would adversely impact the U.S. real estate market.

Foreign direct investment into the U.S. not only creates more jobs but also contributes to the demand for U.S. real estate. In fact, foreign investment may be responsible for creating two million U.S. jobs by the end of 2006, which further bolsters the demand for U.S. real estate.

Permanent and temporary immigration of foreign-born workers into the U.S. further bolsters the demand for real estate. According to the Joint Center for Housing Studies at Harvard University, 1.2 million net immigrants are expected to arrive in the United States annually. This immigration pattern is expected to offset the decrease in housing demand by post baby-boomer generations.

In summary, the impact of foreign investment and immigration into the U.S. will continue to play a major role in the U.S. real estate market.

If you own a luxury vehicle and you make good decisions that add value to you and your family’s well-being, then this article is for you.

Sometimes we make purchases for emotional reasons, such as a luxury automobile. It gives us a feeling that our life is good, that we have made right decisions along the way and we deserve the fruits of our labor. In a similar vein, we make good business decisions based on logic to ensure our investments will bear fruit. When we have made the right business and investment decisions, it allows us the right to make the emotional decision to purchase a luxury vehicle, or a bigger home, boat, or holiday property, and very few can argue with that logic.

What if you were presented with an opportunity to make a business decision that also involves a well being component which would give you both emotional satisfaction and the rewards of a good business decision?

From a business perspective, to invest in a luxury property in the Caribbean offers the opportunity for tax free rental income and use of the property along with its myriad facilities whenever you and/or your family need a getaway. From an estate planning perspective, because your luxury property is in a tax free zone, there are no taxes to pay on the rental income or when you sell or transfer the property to your heirs.

From an emotional perspective, you have a luxury property in a gated community, on a hilltop, looking down on the Caribbean Sea. With full use of the white sandy beaches, close to major shopping, deep sea fishing, scuba diving, snorkeling, and a casino nearby. A lifestyle most people only dream of but you have earned the right and deserve the best.

Now that costs are down, you will possibly be able to obtain full value for 80 cents on the dollar and earn an ROI of between 5% and 10% tax-free on the Island. It isn’t very often that something comes along that makes both business and personal sense. You owe it to yourself to get the facts and find out more.

Check out the breathtaking ocean view in a gated community on Great Exuma Island in the Bahamas (just south of Nassau). Oceania Heights: Luxury Properties in the Heart of Exuma, Bahamas

With the precarious UK property market in the unstable way it currently is, many investors are looking for foreign property to either invest in or as a bolt hole to get away from it all in the UK.

For those looking for a fairly exotic location and who have money to burn, foreign property in the Middle East is becoming popular. Abu Dhabi and Asian cities have seen an influx of investors of late and this is pushing up house prices.

If this is a little to extravagant for your requirements, consider buying a foreign property in Florida. The pound is strong in US markets at the moment but if you’re looking for a property that isn’t likely to be surrounded by British investors, you could do worse than buy a foreign property on the beautiful islands of Mauritius or Monte Negro.

Given the location, these properties are perfect for letting out as holiday homes and when you’ve really had enough of the depressing British weather, why not emigrate and see out your days lazing on white sandy beaches with a turquoise ocean lapping at your toes?

Mainland Spain has had its fill of British investors but islands off the coast are still promising hot spots for those wishing to invest in foreign property. Tenerife and Mallorca are among the current favourites.

Changes in inheritance tax laws mean that France is more popular than ever for property investors. A property price rise of 8% is predicted for 2008 because of this so the sooner you get in the better. House prices in France are still reasonable and it is an easily and speedily accessible area.

For Caribbean foreign property investors, Grenada is the upcoming investment hot spot. The fact that Grenada is undeveloped in comparison to other islands just adds to its appeal making it the perfect getaway.

With an investment in Grenada now, you could be looking at a 25% profit over the next few years. If you’re looking to let the property out, bill it as the ideal location for water sport enthusiasts. Skiing, surfing, sailing and diving are all popular pastimes that Grenadans.

Turkey has been a bit of a difficult area for foreign property investors but this is due to be addressed this year. Mortgages will be more accessible as will the country itself. With the clampdown that is due on UK second homes, this is the ideal place for that second property.

For sure stability and excellent quality of life, try investing in property in Canada. This is a less densely populated country and ideal for those with a love of snow-boarding or skiing – this itself also providing a perfect reason for letting our during peak season.

Though not the first place you’d consider investing your money, Albania is certainly worth a look. The Italians have already caught on to this market and political stability has made investors feel a little more secure.

Beach front apartments in South Africa, overlooking the Indian Ocean are going for a song right now and South Africa promises to see foreign investors flooding in over the next year or two.

It would seem the world is opening up to foreign investors. All that is needed is some thorough research, some spare dollars and some brave decisions.

One of the hotspots still for Buying Property Overseas as an investment or as your Holiday Home or second home is Turkey. The new region for developers is along the Turkish Riviera in the towns of Alanya, Oba and Mahmutlar. Your apartment will also have good rental income potential. (this is where we purchased our apartment).

The local turkish and foreign folks are all very friendly and don’t let the language scare you off — everyone goes out of their way to help you or find someone who can speak your language.

The Buying of property has even been made easier and you can’t beat the great prices on food shopping or eating out.

Turkey is a paradise of sun, sea, mountains, and lakes and offers a complete change from the stress and routine of everyday life. From April to October, most places in Turkey have an ideal climate that is perfect for relaxing on sandy beaches or enjoying the serenity of mountains and lakes.

Since the beginning of history, Turkey is a country which has a magnificent past having been the home of 13 successive civilizations and it is full of historic treasures spanning 10,000 years. It is difficult to find another country where one civilization leads to another. Turkey is the gateway to Europe and Asia and is a continent at the heart of the oldest continents on earth and a bridge between ages, nations and civilizations. It is a unique country linking East to West and offering past and present as history and geography live side by side.

Turkey borders 8 other countries with Bulgaria lying to the northwest, Greece to the west, Georgia, Armenia and the Nakhicheven exclave of Azerbaijan to the northeast, Iran to the east and Iraq and Syria to the southeast.

Visit our 2 – new websites for some very good information about buying property or living here part of the year. There is even a Free PDF ebook offer all about buying property in Turkey for download to your computer.

Alanya, Turkey Properties

Mahmutlar, Alanya Turkey

Kind Regards,

Bill & Evelyn from Ireland.