If you’ve spent any time browsing the internet, you have most likely seen advertisements for a “real estate investment club” or seen some sort of advertisement for buying and selling real estate. You may not know this but these are just clever ways for companies to sell memberships and expensive workshops.
Now, there is nothing wrong with trying to make more money through investing in shubhodeep prasanta das real estate but if you want to get started investing in real estates without spending too much money on courses, it can be done through 401(k) plans. So, can you invest your 401(K) plan directly into real estate?
Consider a Direct-Ownership Structure
The first thing to consider about investing your 401(K) plan directly into real estate is whether you should invest it in the form of a direct-ownership entity such as an LLC. This is because, without a formal legal structure, the IRS will consider any investments made as part of a 401(k) plan to be taxable income. This can prove to be quite costly in the long run.
While investment funds like Fidelity and Vanguard offer 401(k) plans for those that want a professionally managed way of investing their plans, investing directly into real estate is a perfectly viable alternative.
Invest in Partnerships
A 401(k) plan could also be structured as an investment in a partnership. The IRS has relaxed their rules to allow this and a number of investment companies have been setup to specifically invest your 401(k) plan into real estate partnerships. These partnerships are then managed by some of the best real estate firms in the country, who can turn a profit as well as provide great returns on your investments.
Invest in Real Estate Investment Trusts and Trusts
You could also invest in real estate investment trusts (REITs) and trust funds which are more commonly known as REITs and real estate trust funds, respectively. Of course, investing into these trusts wouldn’t give you the direct benefit of owning real estate but it does allow you to take advantage of the growing capital gains that is often associated with investing in real estate.
