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How to Buy Real Estate With Your IRA (Especially If You're Young)

NEW YORK ( MainStreet) -- Have you identified a real estate hot spot, and do you want to buy property there?

If so, you can probably use an individual retirement account to get the job done.

RealtyTrac, an Irvine, Calif., real estate analytics firm, is out with a report listing the "Top 15" real estate hot spots in the U.S., along with some advice on how to use retirement plan vehicles to buy property in there.

The company ranks six Florida cities in its list of 15 retirement havens, including Dunnellon, Naples, North Fort Myers, Punta Gorda, Sun City, Venice and Orange County.

Arizona and California accounted for two cities each, while Arkansas, Pennsylvania, Oregon, and New York had one city on the list.

"All these popular retirement cities will very likely be an area of growth in the housing market over the next 15 years as baby boomers retire in greater numbers," says Daren Blomquist, vice president at RealtyTrac. "The baby boomer generation started retiring in 2011, a trend that will continue at least through 2029, ensuring plenty of demand for both rentals and owner-occupant purchases in these markets for the foreseeable future."

To get into the action, real estate-wise, RealtyTrac advises using a retirement account to purchase property in these soon-to-be hot spots.

"Given the combination of bottomed-out home prices and a still-tight lending environment, utilizing funds from a retirement account to purchase investment homes with cash, or at least with a large down payment, can give individual buyers a better chance of competing in this tight housing market," Blomquist adds. "Provided the investments are made with thorough research beforehand, this investing strategy also gives consumers a path to more quickly build their nest egg since all proceeds from the real estate investment -- whether that be from rental cash flow or from selling the property -- go directly back into the retirement account."

To use an IRA or other retirement plan to buy that property (or even "properties"), experts advise only certain investors act now - mainly younger real estate buyers.

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