Turnkey Real Estate Investments and Self-directed Solo 401k Plan
For many self-employed professionals or independent investors, having a self-directed Solo 401k is the first step toward a better, more secure retirement future. The next step is to make sure that the retirement plan is properly invested to its best earning potentials.The Solo 401k plan is unique for its flexible investment options. For that flexibility, many investors are now considering purchasing turnkey real estate investments for their Solo 401k plan.
Understand Turnkey Real Estate Investment
Turnkey real estate investments are opportunities that are fully set up for investors. With this type of investment, investors do not have to worry about looking for a property, doing rehab, or finding and screening tenants. Instead, the turnkey investment providers will take care of the entire process until the property is occupied and starts earning income. The investment providers sometimes can also serve as the property manager. In this setup, the investor can start earning income right away with much less hassle.
Benefits of investing in a turnkey property with a Solo 401k
Investing in a turnkey property comes with many advantages. First of all, owning a rental property can be a great way to generate passive income. The property will earn monthly rental payments, and can also appreciate in value over time. Because the investment is secured with a property, investors are facing a much lower risk of losing it all, comparing to other types of investments such as stocks or mutual funds.
Investing in a turnkey property allows investors to become a landlord without all the responsibilities and hassles. Plan owners of the Solo 401k plan can select a turnkey property and collect monthly income without putting in any extra effort. They can then focus on their core business instead. Because the property is selected, fixed up, and managed by a professional third party, the Solo 401k plan owner will not face the risk of engaging in a prohibited transaction. The plan owner stays detached from the investment and avoids all the risk of expensive tax charges, or even disqualification of the plan.
How to invest in a turnkey property with the Solo 401k
The first thing investors need to do is to setup a Self-Directed Solo 401k. Keep in mind that all Solo 401k plans are not created equal.Trust companies, banks, or custodians may restrict the investment options to their products. Make sure to go for a self-directed Solo 401k that allows investments in alternative assets, including rental properties. The next step is to fund the retirement plan, either through contributions or rollover of existing 401ks or IRAs. Once the plan is properly funded, the plan owners can start looking for a turnkey property that fits their criteria.
Ventures Realty provides acquisition and disposition services for Ventures 5280 (parent company), a boutique real estate investment management firm that sponsors and operates Airbnb short-term rental and vacation home rental investments for equity partners and accredited investors.