Rules About Buying Real Estate Within an IRA Account


Using an IRA for real estate investment purposes can be highly profitable, as long as you make the right choices and follow the rules. Here are some of the things that you need to consider.

Choose Your Custodial Company Carefully

As with anything else, there are good companies and some that are not so good. It is not unusual to see companies charge high fees when someone is buying real estate within an IRA account. Sure, more paperwork is involved, but really good companies do not charge higher fees for handling the paperwork. Their annual fees are based on your total account value, so they have a vested interest in “wanting” your fund to grow.

Some custodians won’t even allow you to use your IRA for real estate investment purposes. And, of course, if that option is not offered, you’ll have to transfer your fund or take a roll-over.

Learn the Rules

Roll-overs are only allowed once per year, but you may conduct several transfers. It could be costly, because custodians could charge penalties for transferring the fund in a short period of time, but if you happen to choose the “wrong” custodian, it’s nice to know that you have the option.

There are a number of rules that apply specifically to buying real estate within an IRA account. For example, you cannot use the account to buy property intended for personal or familial use. You can only use an IRA for real estate investment purposes, when the transaction will benefit your future.

Direct or indirect benefits to you or your close family members can cause the IRS to disallow the transaction, which will be accompanied by heavy taxation.

Learn Where the Market is growing

You might not think it is a good time to use an IRA for real estate investment. It’s always a good time, as long as you know where the market is “hot”. There are some areas of the market that have been mostly overlooked for nearly the last twenty years. In those areas, there are long waiting lists full of people that want an affordable home, but none are available. So, buying real estate within an IRA account can benefit you and other people, as well. You can offer affordable housing to people that deserve it.

Learn from the Mistakes of Others

It has been said that a smart investor learns from his own mistakes, but a wise investor learns from the mistakes of others. There are those who are willing to tell you about the mistakes that they have made along the way, so that you can learn how to “wisely” use your IRA for real estate investment deals. But, whether you learn from me or someone else, get more information before you begin buying real estate within an IRA account and be successful. There you have it, time to get out there and discover the options and possibilities.

Start researching and planning. Others are already doing so.

To get started on accomplishing your retirement goals, choose a real estate turnkey company to invest your self-directed IRA money in real estate. This is the best investment strategy that will allow you more flexibility considering today’s economic environment for building a secure financial future.

Isn’t your financial future worth it?