Why Investing in Real Estate Syndication with Gatsby is a Powerful Retirement Strategy
Over the last several decades, retirement investing has gotten more complicated and less certain. With fewer than 20%of Americans on pension plans and Social Security funds drying up, more workers are taking greater control over their retirement savings by opening self-directed accounts.
Self-directed retirement accounts give account holders access to a wider range of investment vehicles, some of which can provide stronger returns than the stocks, bonds, and funds available in a standard retirement account.
For example, accredited investors can use a self-directed retirement account to invest in high-return-potential real estate syndication projects with Gatsby Investment. This gives you all the benefits of syndication investing, plus added tax benefits from the retirement account structure.
Let’s look at the top three reasons why investing in real estate syndication with Gatsby is such a powerful retirement strategy for today’s investors.
Reason #1. Return Potential, Boosted by Added Tax Breaks
Gatsby’s real estate syndication projects have produced average annualized returns of 22.32% since 2017. These high returns are the result of strategically selected properties, streamlined systems, and industry connections that reduce our expenses and increase our margins.
Because our investors hold an equity stake in the underlying real estate, they benefit from the inherent tax benefits of real estate ownership, including operating cost deductions, depreciation, and lower capital gains tax rates.
But investing through your self-directed retirement account means you also get to defer your taxes or withdraw your gains tax-free in retirement:
- When you contribute to a traditional-style self-directed retirement account (like a self-directed IRA or 401(k)), your contributions are tax-deductible in the year of contribution, essentially allowing you to use “pre-tax” dollars to fund your account. Since these contributions are not taxed, you may be able to invest more, allowing your capital to grow faster. Gains held in the account grow tax-deferred until you start withdrawing from the account in retirement (at which time they are taxed as income).
- When you contribute to a Roth-style self-directed retirement account (like a self-directed Roth IRA), you contribute “after-tax” dollars, meaning that you have already paid income taxes on those amounts. Those funds are then not taxed when you withdraw them from the account in retirement.
And, you can reinvest your proceeds into future projects, allowing you to compound your returns for faster growth.
Reason #2. Passive Investing with Expert Management
Whether you’re investing in Gatsby’s projects through a retirement account or as an individual, you’re investment is completely passive; we take care of every detail for you. This removes the hassle and headaches of being a landlordwhile easing the financial burden and time investment typically required in direct property ownership.
For those who invest through a retirement account, this perk is especially crucial because self-directed retirement account holders are prohibited from direct involvement in their investments. For example, if you were to purchase a rental property through your self-directed retirement account, you would be prohibited from using the property yourself (or having any disqualified person like a spouse, child, parent, or fiduciary use the property), making repairs to the property yourself, or even maintaining the lawn yourself. But when you purchase a syndicated rental property, you already have the team in place to manage this for you, allowing you to automatically retain your distance.
Reason #3. Access to High-Quality Real Estate Deals with Lower Minimum Investment Amounts
Through syndication, you can own a share in $1 million+ properties that would be difficult for an individual investor to attain. For example, Gatsby has established a niche strategy of developing multi-family properties with 4-10 units and either selling upon stabilization or renting for passive income. Very few investors have the resources and connections in place to develop a multi-family building. But with Gatsby, you can tap into the strong return potential on this type of project without any prior experience or investing any of your time in the deal.
Gatsby’s low investment minimums (as low as $25,000) allow you to quickly and easily diversify your retirement portfolio by spreading your capital across multiple projects.
How to Invest in Syndication Through Your Retirement Account with Gatsby
Gatsby accepts the following retirement account types as a way to invest in syndication through your retirement account:
- Self-Directed Traditional IRAs
- Self-Directed Roth IRAs
- Self-Directed SEP IRAs
- Self-Directed SIMPLE IRAs
- Self-Directed Traditional 401(k)s
- Checkbook IRA LLCs
- Checkbook IRA Trusts
- Checkbook Solo 401(k)s
Simply sign up for a free account with Gatsby, and enter "Retirement Account" when asked how you’d like to invest. You’ll then have a chance to provide your income and asset information to confirm your status as an accredited investor through Verify Investor, as required by the Securities and Exchange Commission (SEC). Once verified, you can choose from our available real estate syndication offerings, and we can work with your account custodian on the remaining documentation and transfer of funds to activate your investment.
Leverage Gatsby’s experience, skills, knowledge, systems, and network to boost your retirement savings and enjoy the retirement of your dreams!