Types of Real Estate Investments in an IRA
There are many types of real estate investments that can be purchased in a self-directed IRA.
The most popular asset in a self-directed IRA is real estate. Commonly referred to as real estate IRAs, these retirement plans can invest in various types of real estate assets.
Some examples include:
- Single and multi-family homes
- Private notes and mortgages
- Commercial property
- Rental property
- Apartments and condominiums
- Rehab-and-flip properties
- Real estate owned (REO) properties—foreclosures
- Improved and unimproved land
- Offshore property
- Building bonds and commercial paper
- Tax liens and deeds
- Tangible asset and trust deeds
Keep in mind that when you are investing in real estate to build retirement income, you cannot receive any personal benefits from the property, such as vacationing in a rental property or living in a house that your IRA owns. In this example, you would be considered a disqualified person – making it a prohibited transaction in your real estate IRA which could result in penalties or loss of the IRA’s tax-advantaged status.