Rental Property Investor · Chicago, IL · Member since 2019 · 30 posts · 5 votes
Hello all I was wondering if it would be a good idea to open up a roth ira account and save for retirement.Or save that money that im going to put into the roth ira and purchase my first investment property and save for retirement thru realestate investing instead.Any thoughts would be greatly appreciated.Thanks
If I were you...I would puchase the property first and put next year's savings in the Roth. I have both retirement accounts and rentals. It gives me more flexibility in the future. If one is down, I can pull from the other income source.
@Alejandro Lozano this is an interesting question and I have wondered the same thing. Since high school I have been putting most of my savings into my Roth and other investing accounts. However, I decided to switch to real estate midway through last year and am now saving for my first property.
The answer to your question really comes down to what you are comfortable with. When you purchase a share of stock, you have no control over the market. In other words, unlike a property, you can't negotiate a purchase price for a stock and you only have one exit strategy (unless you are using options).
The reason I changed my focus to real estate is because I want more control over my investments and that control gives me the opportunity to make superior returns in real estate.
Keep in mind that you can use a self-directed IRA to invest in real estate, so if you want to keep contributing to your IRA you might want to check that out. In fact, @Brandon Turner talks to guests about self-directed IRAs fairly frequently on the BP Investment Podcast so check that out too!
@Mary K. yes that sounds like a good idea to first purchase and then invest in roth ira because I would still be investing thru real estate when I buy my first property thanks.
@Hayden W Gibson yes real estate would give me more control over my investment especially since I can negotiate selling price when looking for good deals and I also feel that I can make better returns thru real estate when I find a good deal.