3 Steps to Open a Real Estate IRA

3 Steps to Open a Real Estate IRA

If you’re not too impressed with the world of administrator directed IRA accounts, welcome to the club. More often than not, you can expect limited investment choices focused mainly on Wall Street stocks, bonds, and mutual funds. Lately, the stock market has exhibited a dizzying tendency to take your portfolio for a roller coaster ride. It’s enough to make you wish there was a different kind of retirement account. Well, it’s your lucky day because there is and it’s called a real estate IRA.

A real estate IRA is a special sort of self directed account, one specially designed to hold property investments. At Young Wealth, we’re of the firm belief that any sort of self directed account is preferable to one where someone else calls the shots, but being able to invest in real estate on a tax deferred basis is really in the wheelhouse of potential future profits.

Luckily, you don’t have to be a genius to open a self directed real estate IRA. In fact, it’s pretty simple. Follow the three steps below and you’ll be good to go.

1. Find an Administrator: The IRS is not going to let you be in complete control of all things related to your IRA, even if it’s self directed. Your first step is to find a financial services company that offers self directed IRAs. There’s a good chance your bank can do this for you. If not, check the Yellow Pages or go surfing (online, of course).

2. Fund Your Account: Once your account is open and ready for business, it’s time to put some money in there. Many people choose to roll over funds from their traditional IRA, but you can also simply make a contribution to the new account.

3. Invest: This is the fun part. Once your new real estate IRA is locked and loaded, it’s time to buy some real estate. Since the company administering the account is forbidden from offering investment advice, you might want to visit our affiliate JasonHartman.com and browse our free educational resources related to income property investing. The critical part about placing real estate into your IRA is that it cannot be for personal use! The IRS is quite strict on this topic, so don’t try any funny business.

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