Real estate agents are essentially the CEOs of their own company. Agents control their workflow, how much business they conduct and are solely responsible for their retirement.
With AgentIRA, a new service offered by the Entrust Group out of San Francisco, agents can have more control over their retirement plans. Agents who choose to enroll in AgentIRA do so through their brokerages. There is no cost to the broker, but there is an annual fee of $250 per asset for the agent.
For each transaction, agents can allocate a portion of their commission to their own self-directed IRA. The custodian of the IRA chooses what to allow in the IRA-approved stocks, bonds, CDs and mutual funds.
A self-directed IRA is slightly different. The custodian, in this case the Entrust Group, also allows real estate investments, as well as a plethora of other options. Other areas of investment include mortgages, precious metals and tax liens.
The Entrust Group’s market research report showed real estate, particularly on the West Coast, as a strong investment through a self-directed IRA.
“The challenge we face is getting the word out to the agents that the opportunity exists. Once they are aware of the opportunity, they want to see how they can take advantage of it,” Entrust Group President Jason Craig said.
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“We also work with agents to let them know that they can incorporate the self-directed IRA to help them grow their business. They are working with investors and individuals that have money in their retirement that they thought had to be locked up in the stock market,” Craig said.
The advantage for brokers, according to Craig, is also the talent retention aspect; offering yet another amenity to agents helps them plan their futures within the brokerage.
Entrust Group provides industry reports, live events and educational content to help guide and inform agents through their investment.
Of Entrust’s clients, 42 percent purchased real estate through self-directed IRAs in 2015. Their reasoning for purchasing was to profit from using it as a rental, according to the firm. Low prices and the opportunity for property appreciation followed rental income generation.