Breaking Down Real Estate Investment Types Including Self-Directed IRAs

If you’re new to investing in real estate, then it’s understandably a daunting market. After all, there are so many options out there including using Self-Directed IRAs: all you have to do is open up your local real estate listings and you’ll see just how many transactions are happening on a regular basis. Being new – or even intermediate – to this kind of business can be intimidating.

That’s why it’s important to break the process down and segment it to better get a handle on what exactly is going on in real estate. Here, at, we believe that real estate is a very viable option for investing within a Self-Directed IRA. But you’re not going to be able to take advantage of the substantial options within Self-Directed IRAs unless you know what kinds of investments are available to you. For that reason, we thought we would break down real estate investments down by type – and hopefully simplify the process along the way.

Residential Real Estate

Perhaps the most common form of real estate – and often the type of real estate that most people think about when they hear the phrase “real estate” – is residential real estate. Simply put: this is where people live. Homes. Duplexes. Apartment buildings. Investing in residential real estate can be attractive to investors because it provides a steady income when enough of the real estate is filled by tenants who are paying their monthly rent.

In Self-Directed IRAs, keep in mind that you’ll be required to work through a property manager. Property managers can handle residential real estate as simple as rental homes, of course, but they also handle everything from duplexes to apartment buildings. If you enjoy a general “hands-off” approach to real estate investing, residential real estate can serve you well – but only if you know what you’re doing.

Another advantage of residential real estate is that it tends to be less expensive to get into – as the properties themselves don’t have to be very large. A corporate office building, on the other hand, does require a major investment.

Commercial Real Estate

Any type of real estate that is zoned for commercial use could fall under the category of commercial real estate – including office buildings, large and small, as well as retail space. Typically, these properties require a larger investment to secure ownership…but that isn’t to say that there aren’t small commercial real estate options available in the market. A real estate investor who works in commercial real estate will also have to hold a degree of business acumen, because they’re generally dealing with the prospects of small businesses and startups as they rent out space.

Industrial Real Estate

Industrial real estate isn’t often put in the same list as commercial real estate and residential real estate, but if you want to understand what’s out there, it’s important to mention here. Industrial real estate can be very costly and difficult to work with, but since it’s also a piece of the overall market, it’s difficult to pass up mentioning it.

The question is, what will you do with your growing knowledge about real estate? Will you use real estate within a Self-Directed IRA to grow your retirement portfolio and diversify away from the stock market? Or will you simply let opportunities pass you by? Depending on where you are in your retirement journey, your answer might be different. But if you still have questions about any of this, call us at 1-866-7500-IRA(472) to learn about investing in real estate within a Self-Directed IRA.