| Can I Buy My House With My IRA? |
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| Written by John Coktostin |
| Saturday, 10 July 2010 08:51 |
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It is possible to invest your IRA in real estate, but there are some things you should consider. The IRS does not allow investing your IRA in life insurance or collectibles such as art work, memorabilia or gems. Using your IRA to invest in real estate is possible, but not necessarily easily done.
It is possible to invest your IRA in real estate, but there are some things you should consider. The IRS does not allow investing your IRA in life insurance or collectibles such as art work, memorabilia or gems. Using your IRA to invest in real estate is possible, but not necessarily easily done. First you need to create a self directed IRA. You need to have an independent custodian for that IRA. There are brokerage companies, trust companies and other financial institutions that can serve as your custodian, so check around. Doing a web search for "self directed IRA custodians" can help you locate some. Check into their services and fees so you know exactly what you will be getting. Make sure to find out what their insurance coverage is - you want your assets to be protected! Some custodians will also help you with other investments, such as stocks and bonds or mutual funds, others will not. Make sure you know up front exactly what services they provide. Make sure you understand the rules of the investment. Some custodians will offer rent collection and other services. Others won't and you'll need to make other arrangements. You should probably avoid high maintenance real estate for this kind of investment. Don't forget there are other things to consider as well. Your IRA can't buy any property that will be used as your residence or as your vacation home. You also can't rent, buy or lease any property from your spouse, parents or children. If the property is mortgaged, most of your gains will still be subject to taxation. You could also loose any tax break advantages given to homeowners. You'd better consult a tax pro before doing anything like this. When considering a real estate investment for your self directed IRA, remember to figure in the costs of property management and custodian fees. Also remember to figure in the tax changes. If you will soon need liquid assets, this plan may not be right for you. Look at all sides of this investment before jumping in. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. As a leading provider of self directed IRA and self directed 401k products, administrative and custodial services, NAFEP focuses on helping you succeed. |
| Last Updated on Friday, 16 July 2010 15:46 |