Today, real estate is considered one of the most popular forms of investing in with a self-directed IRA. This is because it is a simple way for investors to grow their personal wealth and diversify their portfolios.
But when it comes to your retirement plan there are hundreds of self-directed IRA companies to choose from and making a decision can be difficult to say the least.
It’s best to think of an IRA as a trust and the custodian as a trustee, so when making an investment the trustee is the one who actually carries out the transaction.
Important Rules to Know
First, it is important to know that your IRA is the owner of the property so the title of the asset must be in the name of the IRA administrator.
Second, you’re not allowed to invest in a property for personal use. This means that the real estate you’re purchasing using your IRA is for investment purposes only. In addition, you must be careful you are not doing business with “disqualified parties,” such as your spouse or family members.
Third, since the IRA is the owner of the property it must pay the bills and collect the income. For instance, if the investment is in a rental property than all rental income should return to your IRA account. Also, any bill payments including property taxes or renovations must be paid with the cash in your IRA.
How to Start Investing in Real Estate
- You’ll need to set up a self-directed IRA account with one of the companies listed below we have provided a short self-directed IRA review for each of the custodians.
- Fund the account by either making a contribution, transfer or rolling over your funds from an old 401k, 403b or pension plan.
- Select the real estate investment you want to purchase and one of the companies will guide you through the process.
Best Self Directed IRA Companies
Advanta IRA is a self-directed IRA retirement plan custodian serving clients nationwide. Advanta provides their clients exceptional personal service, experience and knowledge that is paramount in administrating self-directed IRAs. Advanta IRA allows their clients to take full control of their investment retirement plan as well as provided education on using their retirement plan to grow wealth through providing helpful webinars, alternative investments and support. Advanta has been providing self-directed IRA services for over 20 years.
A CamaPlan self-directed IRA account is the faster, safer way to true financial freedom. Grow your wealth and secure your future by deciding what types of investments you want to hold in your individual account. Camaplan IRA provides exceptional service to its clients while allowing Self-directed IRA holders the freedom to grow their retirement plans as they see fit. CamaPlan considers itself in a “unique position of being a nimble, responsive player among the larger financial firms that are beginning to enter the self-directed IRA market.”
NuView IRA joins several organizations to better service the community, including investor clubs, professional associations for attorneys and tax planners and the Better Business Bureau. NuView IRA has over 10 years of experience managing self-directed IRA accounts. They are highly recognized among the industry leaders of self-directed IRA custodians.
New Direction is a trusted provider of Custodial and Administrative services for traditional and Roth IRAs, HSAs and other tax advantaged plans. Physical custody and administrative oversight in provided by Mainstar, in Kansas. The office of the State Bank Commissioners of Kansas regulates Mainstar and its oversight extends to New Direction’s accounts. New Direction IRA custodian is a growing company. They have managed millions of dollars in their client’s assets, and are eager to help clients find new and exciting opportunities to invest their self-directed IRA
As you can see, any of these provides would be a good choice if you choose to start investing in real estate using a self-directed IRA account. Defining the best self-directed IRA custodian would be a hard task unless you signed up and starting investing. Before you select any of the above IRA custodian, be sure to get them to disclose their fee of service.
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