Whether it’s the lure of an affordable beachfront condo, or a hillside villa, more Americans are choosing to live either partially or fully outside the country now more than ever. Central America, including Costa Rica, has seen a sharp increase in growth of expats. According to an article quoting the US Ambassador to Costa Rica in 2017, over 100,000 Americans now live in Costa Rica alone.
This surge of activity has caused many IRA holders to seek ways that they can utilize the special tax advantages of those accounts to invest in real estate in areas that they see growing in value and rental rates.
Although these investment opportunities may not be promoted by traditional stock advisors, with a self-directed IRA from NuView Trust, many foreign investment properties can now be purchased within an IRA. The rules are simple—the property must be purchased for investment purposes only, not to be used by the IRA owner or certain designated relatives. All the costs of the property must be paid by the IRA, and all the revenues will in turn belong to the IRA. Think of this as building your nest egg in potentially the same community where you hope to one day, or currently live.
Why isn’t this fact better known? Most advisors are compensated based on their recommendations, or that of the companies they represent. That is why over 90% of IRA funds own US based stock exchange traded assets. Imagine instead having the choice of directing your retirement funds to private investments of your choice— including international real estate.
You could be purchasing a rental condo near the beach, putting it into a managed rental program, and watching your account build based on your selection. If you later wish to retire, you have the choice of taking the property as a distribution and being taxed at its current value, or, if it is purchased in a Roth IRA, held for at least five years and you are at least 59.5 years old, then there are no taxes at all on the distribution. Few realtors understand the power of how a Roth IRA can be used effectively to build cash as well as equity within real estate.
Based on the country where the IRA is to be invested, the property may be purchased directly or alternatively, and is done through an entity established uniquely for this purpose. The good news is it is neither difficult, nor unique – just follow the rules. As with all investments, do your due diligence and use trusted and knowledgeable advisors to make the best possible decisions.
For more information, just call NuView Trust at 407-367-3472 and ask about the process of purchasing property, including in Costa Rica, inside your IRA. You may be surprised how quickly your retirement investments can follow your dream, wherever it may be.
Glen Mather is CEO of NuView Trust, a leading Self-Directed Custodian holding well over $1 Billion in IRA accounts. staging-wwwnuviewtrustcom.kinsta.cloud