Turning Your Real Estate into a Retirement Plan

Many people have real estate in their self directed retirement plans. This has benefits as well as disadvantages. The benefit is that one can use retirement savings to purchase properties. The downside is that the tax advantage do not go onto your personal tax return. Regardless of how the title to the property is held, owning residential real estate for rental purposes is a job. That is not retirement.

There are two great ways to turn this property into a reasonably trouble free retirement income. The first is to sell the property with seller financing and have the mortgage income. A mortgage doesn’t require painting or repairs. If the tenants in the property are really good they are the best prospects. The second way is to sell the property with a 1031 exchange and buy net leased properties with credit tenants. This is the best approach in many ways because there is little chance that a lease, unlike a mortgage, will be paid off early.

Either one of the methods allows for the payment of taxes as the funds are received. The net leased property actually shelters some of the income. If the property is in a retirement account, a certain amount will need to be drawn down every year anyway after the beneficiary reaches a certain age.


David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/

1031 Exchanges International

1031 Exchanges International
Often the question is asked, “Can I do an exchange on international property”. The answer is like John McCain’s underwear. It depends. The 1031 exchange (named after section 1031 of the revenue code) is also called a “like kind exchange”. Real estate has a very special place in this code because all domestic real estate is considered like kind. You can trade a farm for an apartment building. You can even trade for a leasehold interest.
Someone trading livestock or equipment is held to much closer standards. You cannot trade a bull for a cow or even a beef bull for a dairy bull. You cannot trade a tractor for a printing press. I apologize for diverting so far off course before answering the original question.
You can trade any domestic business use real estate for any other domestic business use real estate. This would exclude a property used as a personal residence. You may trade any foreign business use real estate for any other foreign business use real estate; but you cannot change domestic for foreign or vice-a-versa.


David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com