5 Things You Should Know About Investing in Real Estate with Your SDIRA

Estimated reading time: 2 minutes(Last Updated On: October 23, 2019)

A diversity of investment options for your IRA is an important factor in successfully growing your retirement fund. One of the many benefits of a self-directed IRA (SDIRA) is that you have the opportunity to invest in real estate. Real estate investments can be very lucrative for the right person, and you can use your SDIRA to invest in land, rental properties, fixer-uppers, or even building companies. Here are some quick facts that will help you learn whether or not real estate is the right investment option for you.

1. No SDIRA-funded vacation homes

Sadly, you can’t use your SDIRA funds to buy that new beach house. Real estate options are barred from benefitting you or other “disqualified” people, such as your family, business, or employer. If you violate these rules, your SDIRA could be “disqualified”, meaning that all of the funds within could be liable for taxation.

2. Time is money

While real estate is more time-intensive than other “passive” investments, if you do the research and know the market, it can pay off big time. A primary advantage of an SDIRA is that you get to control exactly where the money goes. This gives the savvy investor the opportunity to use their funds wisely to create bigger profits.

3. DIY is a no-go

Real estate options won’t let you flip a house DIY-style. Your properties will need to be maintained through independent contractors. Additionally, you don’t get to keep any of the profits from the rental or sale of your properties: the money goes back into your SDIRA until you choose to invest again or take a distribution.

4. Consider a real estate investment trust (REIT)

In a REIT, numerous investors fund in a company that owns and manages real estate, getting a share of the profits in return. REITs can be a great option if you like the idea of investing in real estate but don’t have a lot of know-how. You are not responsible for the actual property management, and unlike individual real estate investments, REITs are more liquid. They can be easily bought and sold, as many are traded on the market.

5. Quest Trust is here to help

If you’re interested in real estate options, check out this presentation by Quest Trust Company CEO, H. Quincy Long, and learn more about how real estate investments can grow your retirement fund. Visit https://www.youtube.com/watch?v=Q4pQ0D0dr5Q

After that, you can learn more helpful hints to manage your self-directed IRA with the Quest Class Archives at https://www.questtrustcompany.com/education-center/webinar-archives/

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