Buying Rental Real Estate in Costa Rica In Your IRA

It’s a bit of a head scratching time for most investors… With the stock market today at an all-time high, is it a good time to look for more undervalued investments? Costa Rica may provide an attractive alternative.

Your dream may be to retire in Costa Rica — or perhaps you are already living here. In either case, the allure of this paradise is undeniable, and now, through your IRA, you may be able to take advantage of real estate opportunities of which most Americans are unaware.

Through a Self-Directed IRA, you may be able to purchase rental real estate in Costa Rica, place it with a property manager, and earn all the returns tax-deferred within your IRA. Any expenses of the property are paid from the IRA, and all revenues belong to the IRA.

If you wish to take future distributions tax-free, you can convert to a Roth IRA before purchasing the property (you will have to pay ordinary income tax on the converted amount).

Imagine the possibilities of owning a property in your IRA — perhaps in the very neighborhood that you live. The potential of future appreciation coupled with the cash flow of rental income may be a great choice for your IRA, especially given the historically high prices in the stock market.

In order to purchase property with your IRA, you must first open and fund an account with a qualified
custodian/administrator. Once the account is open and funded, you have the ability to direct the administrator to make a purchase on behalf of the IRA.

From this point forward, all the expenses and revenues belong to your IRA. For example, for our clients, property is titled NuView IRA FBO (for the benefit of) client name, IRA.

Once the property is purchased, it is advised that a property management company be contracted to collect the rents and deal with maintenance issues. The net proceeds from those rentals are deposited directly into your IRA, without any taxes.

Should you later wish to sell, the proceeds from the sale also accrue to your IRA.

Simply follow the rules of real estate purchase in Costa Rica. If purchased in a corporation, all shares are titled in the name of the IRA.

All transaction paperwork is to be translated into English, and if title insurance is not obtained, the
IRA holder must waive such obligation. All documents are approved by the IRA holder and then executed by the IRA custodian’s representative.

Once the paperwork is completed, the funds are wired to the escrow agent for dispersal.

At this point the property becomes an asset of the IRA.

Now you can can join the thousands of Americans who own foreign properties in their retirement plan. If your heart is in Costa Rica, perhaps it is time that your retirement is as well.

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Written by Glen Mather who is President of NuView IRA, a leading administrator of real estate focused self-directed IRAs. For assistance in your IRA purchases, you can contact Glen by email here or call him on (407)367-3472.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.