Raw Land Investments

Raw land investments in an IRA presents interesting options.

While often there are low costs and virtually no maintenance involved in investing in raw land, sometimes expenses can be extensive. This depends on the purpose of acquiring land as an asset. It’s important to consider these factors, as any and all expenses must be paid directly out of your self-directed IRA funds.

Popular investments in raw land include:

  • Residential and commercial development property – prime pieces of land in areas where growth is expected can be parceled off and sold or leased to building contractors and investors; if you have enough capital in your IRA you can develop the land in this way yourself
  • Oil and mineral producing land – mineral rights can be leased to mining companies or other investors; the right piece of land can also be bought at a fair cost and sold for more to achieve again
  • Timberland – both hard and soft woods can be planted, harvested, and sold to make a profit; tracts can also be leased to others, such as timber companies for the same purpose

Land as an investment within your self-directed IRA can be complex. Different states have different requirements pertaining to land use. If you are going to develop the land, become knowledgeable of permitting requirements and other regulations that apply. It is recommended that you consult with trusted professionals who are familiar with land assets to assist you in the investing process.

Make sure your IRA has adequate capital to purchase the asset and also to fund any maintenance or development projects you intend to take on. Remember, as the IRA owner you are unable to perform any work yourself and must hire third parties for any tasks. 

Additionally, you must fully understand and follow IRS guidelines and rules pertaining to these investments in a self-directed IRA.

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