Self Directed IRA - Real Estate as part of the portfolio

Posted By Scott Vansant @ Oct 3rd 2022 11:48am

A Self-Directed IRA (SDIRA) is an IRA held by a custodian that allows investment in a broader set of assets than is permitted by most IRA custodians.  Custodians for SDIRAs generally disclaim most duties to investors (i.e. custodians will not research, investigate or recommend investments), and may allow investors to invest retirement funds in alternate assets such as real estate.

Real estate as an asset in a retirement portfolio can serve as a good way to diversify the investment portfolio and provide another avenue for a good rate of return.

There are many rules regarding having real estate as part of the SDIRA investment, including but not limited to having this asset be purely an investment, i.e., you and your family can’t use it for personal or business.

There are numerous companies that specialize in helping to set up and service SDIRAs.

The Internal Revenue Service (IRS) does issue letters to IRA sponsors, trustees and custodians certifying that they are complying with requirements concerning investor rights, account administration, and standards for the establishment of documents that allow contributions to be deductible.

The IRS does not review or approve investments, endorse any investments, advise people on how to invest their IRAs or issue any statement that any investment in an IRA is protected because a particular trustee or custodian has been approved by the IRS.

See the IRS for more information on SDIRAs.

See the SEC for more information on SDIRAs.

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