Trust Deeds are an excellent investment option for someone looking to transfer their funds from a typically low-yield account (savings account, CD, mutual fund) to something that gives them a better return on their investment.
Typically, a savings or CD account is going to return between 0 and 2% on your investment. It is relatively safe, but you won’t realize much growth. On top of this, inflation often eats up most of the increases in value.
The same goes for IRAs and 401Ks. They can be enticing because of the deferred tax benefits they offer, but the reality is that they do not provide exceptional returns.
An attractive option for IRA and 401k investors is to roll them over into Trust Deeds through what’s called a Self-Directed IRA (perhaps a good place to hyperlink to the future checkbook IRA blog). This allows investors to receive a possibly higher ROI while still maintaining the benefits of deferred taxation.
Three major advantages of investing in Trust Deeds:
- Security: They are secured and backed by real estate, and are recorded in the public records.
- Market Resistant: For example, a 30-75% Loan to Value means the market would have to drop 25-70% before your original investment would be affected.
- Great Risk-To-Reward: Considering the safety measures in place, a 6-10% annual ROI is very attractive.
As an investor in a Trust Deed, here are some of the benefits you gain:
- Consistent monthly income through interest payments
- A possible higher interest rate than those paid by most banks or other institutions
- Trust Deeds are liquid and you may sell relatively easier to another investor
- You may borrow against them by using them as a security
- You are not responsible for payment of property taxes, insurance, maintenance, gardening, repairs, or any other expenses related to property ownership
As with any investment, it is essential to consider your security and lifestyle needs before coming to a decision. At Advant Wealth, we customize our solutions based on our clients’ needs, creating new opportunities for them to reach their individual goals. Contact us today to find out if Trust Deeds can help get you where you want to be.
DISCLAIMER: This blog is for informational purposes only and is not individualized financial advice.