What Kind of Real Estate Can a Self-Directed IRA Investor Put in a Retirement Portfolio?

Is It Time for a Self-Directed Real Estate IRA? Investors Buy a Record Amount of Homes

With home prices soaring as of late, one thing is clear: the people who are cleaning up are those who already have their Self-Directed Real Estate IRA in place, funded with real estate assets like single family homes. That’s what many investors can achieve with a Self-Directed IRA, which allows investors to put aside retirement money into a wider variety of retirement asset classes, including real estate.

According to recent statistics highlighted at Business Insider, investors spent some $50 billion on homes last quarter. This suggests that the housing market is on fire, particularly in the regions around Atlanta, Charlotte, and Jacksonville, which, as Business Insider noted, are some of the primary targets of the buyers. What does this mean for people considering a Self-Directed Real Estate IRA? Here’s an introduction to the concept.

What is a Self-Directed Real Estate IRA?

Put most simply, a Self-Directed Real Estate IRA is simply a Self-Directed IRA in which you place real estate assets. This brings a new question: what is a Self-Directed IRA? It’s like any IRA, except one key difference: you’ll work through a custodian, who administers the account. In this case, the custodian can ensure that the purchases you want to make are carried out. In the meantime, you get to decide which assets go into the retirement account. If you choose to invest in real estate, like single family rental units, or single-family units you buy and sell, voila—you have a Self-Directed Real Estate IRA.

Why Is Real Estate So Hot?

As the latest statistics show, people are spending a lot of money on homes these days, which means that any investor who has been holding on to homes may be thinking about taking a profit. There are a number of reasons real estate might be so hot. It may be due to low interest rates, making mortgage credit available to more people than ever. It may be due to the fact that millennials, a large generation, are coming into more money, many of whom are buying their first or second houses. And it may be due to specific regions developing. As the Business Insider article showed, Atlanta, Charlotte, and Jacksonville have had noteworthy engagement in the real estate markets as of late.

Should You Invest in Real Estate with a Self-Directed IRA?

When you look around the world, you might wonder whether the stock market should really be your only source of retirement bandwidth. That’s because relying solely on stocks has a lot of risk with it—and you might not be sure that the stock market will be where you need it to be when you retire. One alternative is to choose a Self-Directed IRA, which will give you access to all sorts of different retirement investment asset classes, including precious metals, private companies, and yes, real estate. The more you explore these options, the more you might feel that it’s a good idea to diversify your retirement assets while using the tax benefits of an IRA.

What Should You Do Next?

If you’ve been reading about these hot real estate markets and want to diversify your portfolio in a way you see fit, the first thing to do is to reach out to a Self-Directed IRA administration firm and begin the process of opening up a self-directed IRA. Once it’s properly structured, you’ll be able to make the sorts of real estate investments you want—within the regulations.

Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at www.AmericanIRA.com.