Wednesday, March 18, 2009

IRA: To put or not to put Real Estate... That is the question

By Alcides Hoy Jr.

With IRA investments into real estate nearly doubling it makes you want to know the WHATS THE SECRET? As stocks decrease real estate seems like an easier way to save any accounts that are doing bad. In an article Walter Updegrave said "Dealing with the myriad rules governing IRA accounts makes the task even more challenging." This is a statement many of can agree with because with news laws being passed everyday the government makes it harder and harder to incorporate real estate into your IRA. With only a small amount of twenty percent of IRA having balances of over $100,000 no one can really afford to buy any piece of property. Then if you gain the funds to fall buy few properties into your IRA your portfolio could loose diversification over time. As you weigh your portfolio to only Real Estate this could increase your risk due to the it being less diversified. With the real estate industry doing as poorly as it is now, if investors were to have mostly real estate at this time their portfolio would be loosing money. This is why diversification is important because without it your portfolio could depend too much on one asset. So if you decide to include real estate into your IRA make sure it is a balanced amount somewhere between ten to fifteen percent.

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