Self-directed IRA investing offers great tax advantages to real estate investors, though the exact benefit will depend on the type of account used.
Choose between rental properties (both residential and commercial), undeveloped land, fix-and-flip opportunities, and more.
In this article, we will describe some of those opportunities by exploring seven types of real estate that can be held in a self-directed IRA: Single-Family Homes Single-family homes are the most common type of residential property, and the most common type of real estate found in self-directed IRAs.
If your self-directed IRA doesn’t have enough cash for these types of investments, your IRA can even apply for a non-recourse loan or partner with other funding sources.
You could use your savings to be a real estate lender and help others purchase homes while also bringing in a profit for yourself.
The payments will go directly to your retirement account.
While this may not be a great choice for generating immediate rental income, these properties can be developed to produce a profit, sold to developers at a profit, or even sold to the government for use by the state.
There are also things to consider, such as performing the proper due diligence and educating yourself not only on the tax laws in the United States, but the tax implications and transaction process in the country where you are investing.
For more information, consult a financial professional or tax advisor about real estate transactions and banking outside of the U.S. Real Estate-Owned Properties If a property has been foreclosed and taken back by the bank, it is referred to as real estate owned, or REO.
Before you invest in this business sector using your IRA, it is best to consult with your investment, legal and tax advisor.