2 Ways to Invest in a Self-Directed Real Estate IRA

Are you interested in investing in real estate? Did you know you could do so with your retirement funds? Because of Trump’s expertise and success in the industry, many are hopeful that his administration presents significant progress in this realm. If you understand how self-directed IRAs, you know gain the opportunity to earn tax-sheltered income for retirement on successful endeavors you choose. And if you’re interested in real estate, here are two ways to invest in a self-directed real estate IRA.

Real estate investing is an interesting topic right now. Because Trump built his empire on business and real estate development, some anticipate growth in that area now that he is in office. His promises to address turmoil and poverty in our inner cities, to create more jobs, and to strengthen our infrastructure and more areCouple gets keys to new home from realtor hoped to boost the real estate industry.

Others feel a bit uncertain. Thanks to the recent hike in interest rates, purchasing a home may have just moved out of the grasp of a large number of Americans who may have issues getting financing. However, a recent report published by Realtor.com indicates millenials and baby boomers are entering into phases of their lives when home-buying is a priority. Both of these points present potential in a few different ways for real estate in IRAs.

Private Lending Investments

You can invest in private notes and mortgages with your retirement funds. These assets are a common way a self-directed IRA earns tax-sheltered income. Basically, your IRA plays the part a bank or lending institution would in loaning funds to people who are buying a home.

If the interest rate hike does prevent people from taking out mortgages, this could be a win-win situation for borrowers and your IRA. The interest rate you assign for the investment can be competitive with the lending institutions and will probably still be higher than you’d earn on investments in mutual funds or CDs. Also, the borrowers (think millenials!) bypass stringent lending requirements of traditional institutions, and your account earns tax-sheltered income on the interest.

Rental Property Assets

Another popular way investors earn income is through rental property, which can also be purchased using an IRA. This alternative asset could potentially present growth if higher interest rates prevent people from purchasing homes—because they have to live somewhere and renting a home or condo may be their only option.

Your self-directed IRA can purchase houses, apartment buildings, duplexes and more. Income is obviously earned via rent payments, which can offer a steady return on your investment over time.

While it’s hard to predict a market based on who is in office or not, it’s easy to see the potential real estate investments present. This is one asset that many believe stands the test of time and survives the harshest conditions of American economy. Historically, property value appreciates over time and if you have time on your side, the above options may be advantageous to your portfolio.

If you have questions about this article and want to learn more about alternative investments in your self-directed IRA, call us at (800) 425-0653 or send us a message. 

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About Scott Maurer

Scott Maurer, Vice President of Sales for Advanta IRA, is a recognized expert in the field of self-directed IRAs. With a law degree from the University of Florida and as a designated Certified IRA Services Professional (CISP), Scott’s keen understanding of rules and regulations fuels his passion to educate others on the power of investing in alternative assets using self-directed IRAs. Scott is a frequent guest on retirement and investing webinars and podcasts, and he has shown thousands of individuals how to achieve financial freedom by teaching them how to use their retirement funds to invest in private placements, real estate, private lending, and more. Throughout his two decades in the industry, he has watched numerous unique investments unfold, giving him great perspective of what is possible when people take control of their retirement funds and investing decisions.