Top 3 Ways You Can Invest in Real Estate with an IRA

You can invest in real estate with an IRA successfully if you pick the right property under the right conditions, and it proves to be fruitful. You can choose from many different assets that have the potential to build income in your retirement account, and you don’t necessarily have to have mountains of money in your retirement plan to invest.

Three common real estate assets Advanta IRA sees people invest in are rental properties, renovation projects, and private lending options. While rentals and rehabs can be a bit time consuming depending on the circumstances, private lending presents an easier way to earn a bit of tax-sheltered income in your IRA. While there are other ways to invest in real estate with an IRA, these are the three assets this article discusses.

Popular Ways to Invest in Real Estate with an IRA


Rental property can be quite the lucrative asset if you have an eye for a good neighborhood or business district and a keen sense of pricing it right. The trick with rentals is obviously keeping them rented out, whether it’s a residential home or a building with office space. If you’re successful in doing that, these assets have the potential to provide a steady stream of income, which is deposited directly into your retirement account. Keep in mind that your IRA owns the property, not you. After you make the purchase, you need ensure the account has adequate funds remaining to pay for any expenses the property incurs. You are not allowed to pay for any expenses personally. Sometimes maintenance can be costly, sometimes not. Either way, just make sure you’re covered.


These investments are so popular and often so successful that, as you know, there are multiple TV shows showing you how it’s done. While the stars make it seem like a ton of fun, renovations are a bit more involved than the shows illustrate. Certainly, you’ve seen the nightmare projects…and that can be a real deal. So, while there is definitely money to be made on rehab-and-flips—your success depends on the shape of the property, the location, and the work that needs to be done to make it a best seller. The goal is to make a profit, after all, and performing due diligence on these investments is critical. You are not allowed to perform any of the renovation work, either. You must hire a third party to do so. And, here again, you must budget your retirement funds properly to ensure the account has the capital to buy the investment and pay for the renovations. Because your IRA owns the asset, all income and expenses flow directly into and out of the account.

Private Lending

Private lending is an interesting way you can invest in real estate with an IRA. Essentially, your retirement plan plays the part of a bank and extends funding individuals or even businesses that need cash. As the IRA owner, you vet the borrowers and set the terms of these loans. Typically, the interest rate can be pretty competitive, as some people either can’t meet the requirements of typical lending institutions or don’t want to go through the hassle to begin with. If your IRA loans money to an individual for a piece of real estate, which is often the case, that property can be held as collateral in case the borrower defaults on the note. And, again, all income flows into your self-directed retirement plan on a tax-sheltered basis.

There is a reason real estate is the most popular investment in self-directed IRAs. There are so many diverse options to choose from in this category, that there’s certainly a niche for everyone! And you are certainly not limited to the above examples. Many people invest in tax liens and deeds, farm land and/or timberland. Improved and unimproved land is also popular. Foreign real estate options are attractive to those familiar with the laws of different lands.

Advanta IRA is a self-directed retirement plan administrator that serves clients across the nation. Our staff has decades of experience assisting investors who hold real estate assets in their IRAs. We don’t sell investments or give advice, but we do ensure the administrative details of your accounts are in compliance with IRS rules and regulations.

Visit our Real Estate Investing Center to learn more about how you can invest using your retirement funds. You can also attend one of our weekly, free events designed to teach individuals about how self-directed plans can help you build desirable income for retirement. While many of our clients hold real estate in their IRAs, they also use many other alternative investments in their plans. Our webinars and seminars are interactive and the knowledge you’ll walk away with will allow you to confidently invest your retirement funds in assets that you know and understand.

If you have questions about this article or wish to speak with someone about self-directed investing, please contact us at (800) 425-0653 or by sending us a message.

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About Jack Callahan

Jack proudly earned his bachelor’s degree in finance and multinational business from Florida State University and his law degree from the University of Florida College of Law. He established Advanta IRA in 2003 and has steadily nurtured and grown the company and the team every year since. Prior to founding Advanta IRA, Jack delivered specialized counsel to real estate investors, small business owners, and real estate professionals on tax, legal and financial matters. As an industry expert, Jack is a frequent speaker on self-directed retirement plans. He is an accredited continuing education instructor for the Florida and Georgia Bar Associations, Florida and Georgia Real Estate Commissions, and The American Institute of Certified Public Accountants.