Talk to an Advisor

What Types Of Real Estate Can I Invest In With My IRA?

At 1031 Exchange Place, we understand the importance of diversifying your investment portfolio and utilizing your Individual Retirement Account (IRA) to invest in real estate. When using a self-directed IRA, you can invest in a variety of real estate types, allowing you to maximize the potential for growth and financial security in your retirement years. Here are some common types of real estate you can invest in with your IRA.

  1. Residential Properties: Investing in single-family homes, condos, townhouses, or multi-family properties can provide you with rental income and potential appreciation. These types of properties are often popular with investors due to their familiarity and ease of management.
  2. Commercial Properties: Commercial real estate investments include office buildings, retail spaces, warehouses, and industrial properties. These properties can offer higher returns and long-term leases but may require more significant upfront capital and expertise to manage.
  3. Raw Land: Purchasing undeveloped land can be a long-term investment strategy with the potential for significant appreciation, especially if the land is located in a growing area or has potential for development. Keep in mind that raw land investments may require more research, as well as patience for long-term gains.
  4. Real Estate Investment Trusts (REITs): REITs are companies that own, operate, or finance income-producing real estate properties. Investing in REITs through your IRA allows you to diversify your portfolio with the benefits of real estate, without the need for direct property management. However, not all REITs are eligible for IRA investment, so it’s essential to verify with your IRA custodian before investing.
  5. Real Estate Funds and Partnerships: These are pooled investment vehicles that invest in various real estate properties or mortgages. They offer diversification and professional management but may come with higher fees and limited control over specific investments.
  6. Mortgage Notes and Trust Deeds: Through your IRA, you can invest in mortgage notes or trust deeds, acting as a lender to property buyers. These investments can generate regular income through interest payments, though there may be risks associated with borrower default.

It’s essential to work with a knowledgeable self-directed IRA custodian to ensure you comply with all IRS regulations and maintain the tax-deferred status of your account. At 1031 Exchange Place, we are here to help guide you through the process and answer any questions you may have about investing in real estate with your IRA.