Real Estate Investing in Your Self-Directed IRA

Did you know you can invest in real estate with your IRA? Since 1974, the IRS has allowed investors to diversify their retirement holdings to include non-traditional investments like real estate. With a self-directed IRA that owns real estate, your account’s profits are tax deferred and the rental returns and/or sale proceeds become part of your retirement savings. However, most investors are unaware that this option is available so we’ve put together this three part series to show you how you can get started.

Historically, real estate has been an investment that offers the potential for both income and appreciation. Many people appreciate that real estate is an asset that they can see and touch rather than a piece of paper being pushed around the stock market on Wall Street. Self-directed IRAs have been around for decades and all you need to get started is a knowledgeable, professional custodian.

Using funds held in your IRA to purchase investment real estate offers advantages like:

  • Tax-deferred growth on your holdings
  • Potential tax-free growth if you qualify for a Roth IRA
  • Diversification beyond traditional investments like stocks, bonds and CDs

Don’t have a self-directed IRA set up? That’s okay! Many different types of retirement accounts are eligible to become self-directed, including but not limited to: Traditional IRAs, Roth IRAs and 401(k) rollover IRAs.

For investors interested in holding investment real estate in their IRA, we’ve compiled a list of several qualified custodians to consider:

  • New Direction IRA
  • The Entrust Group
  • Equity Trust
  • PENSCO Trust
  • Provident Trust
  • Sunwest Trust

Not all custodians are created equal. You will find that fees and services vary and you’ll want to ensure the custodian you choose is appropriate for your personal needs. For questions to ask when vetting a potential custodian, check out the second blog in this mini-series: Finding a Custodian and Understanding Your Options for a Self-Directed IRA.

BlogMichael Shai