Amateur investors are increasingly tapping into their retirement accounts to buy homes and take advantage of the hotter housing market, CNNMoney reported.
"We're seeing many people cash out 401(k)s or IRAs because they want to take advantage of the market," Sean Galaris with LM Funding, a financial services firm.
Tax attorney Adam Bergman with IRA Financial Group said that he gets many calls each day from clients who are looking to invest retirement funds in the housing market. Funds can be rolled out of stocks and into self-directed real estate IRAs without penalty.
"Our average client has retirement accounts of about $150,000 and is looking to buy one or two properties," Bergman says. "After 2008, they didn't trust Wall Street. They wanted hard assets."
Housing prices are on the rise in many areas and investors are cautioned not to overpay for a property and can still get suitable returns from their investment.
For more information on this subject, listen to this week's Real Estate Today podcast. Guest Joe DeDominico joins host Tom Kelly to discuss Real Estate IRAs.