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Buying Real Estate with an IRA
Learn why it offers significant advantages for investors and let us show you some insights about how the process works.

Buying Real Estate with an IRA

Yes, you CAN buy real estate with an IRA! The rules are clear and easy to follow, giving investors access to an alternative investment strategy that provides a critical hedge against inflation, tax-deferred growth and diversification for your retirement portfolio that also has much less volatility than the stock market. Keep reading to learn how to use your IRA to buy real estate.

What is an IRA?

Short for “Individual Retirement Account,” an IRA is a type of investment account that is provided by many financial institutions that provides tax advantages and other incentives to save for retirement.

Do I have an IRA?

Anyone over the age of 18 and living or working legally in the United States can have an IRA account, and there are many different types of IRAs for various circumstances. 401(k)s, TSPs, TSAs and certain other retirement accounts can also typically be rolled into an IRA.

What can I invest in with my IRA?
Real Estate
Real Estate
Precious Metals
 Precious Metals
Mutual Funds
 Mutual Funds
IRAs and Real Estate Investing
The Basics

Buying property with an IRA account allows you to own real estate with no penalties or tax consequences, as long as it is used as an investment property. Any rental income is tax-free, as are the capital gains when and if you decide to sell.

IRAs and Real Estate Investing - The Basics

Most investment advisors won’t tell you how easy buying real estate with an IRA really is, simply because it doesn’t pay them commission, but history proves that it can easily beat the return on investment in typical retirement accounts that are invested in the stock market.

The Benefits

Buying Real Estate with an IRA in a top destination for investment purposes has multiple benefits, including enhanced security and better ROI than other investments, as well as excellent appreciation and protection against inflation.

  • Security: Real estate is secured against a tangible asset.
  • Returns: History shows how real estate returns on investment beat the stock market over time.
  • Appreciation: Investment properties offer greater appreciation and income with very little risk.
  • Diversification: Investment portfolios that contain real estate outperform those that don’t.
  • Tax-Deferred Income: Turnkey vacation home rentals offer tax-free income from high-value guests.
  • Inflation Protection: Rising prices increase the resale value of the property over time.
The Rules

Owning real estate in a retirement account is perfectly legal, provided you follow the current Self-Directed IRA rules to buying property. Here we list a few of them:

  • Property Must Be Held in a Self-Directed IRA
  • Purchase Must Be for Investment Purposes Only
  • All Income Must Return to Your IRA
  • All Funding Must Come from the IRA
  • Real Estate Must Be Titled in the Name of Your IRA
  • All Property Expenses Must Be Paid from the IRA

It’s also important to stress that you cannot live in real estate that is purchased with your IRA account for investment purposes.

The Buying Process

Due to the ease and safety of the transactions, real estate is actually one of the top investments in Self-Directed IRAs. Start by setting up the Self-Directed IRA, then transfer the necessary funds from your existing IRA or 401(k) retirement account(s) to the new Self-Directed IRA custodian. We always recommend working with an experienced real estate investment advisor to help ensure every step of this process goes smoothly, but here’s a quick overview of the process:

Step One
Select a custodian for your IRA and set up a Self-Directed IRA account.
Step Two
Transfer funds from your existing IRA or 401(k) retirement account(s) to the new Self-Directed IRA custodian.
Step Three
Make an offer on a great investment property and inform the IRA custodian by completing the required paperwork.
Step Four
Close on the property and start collecting tax-deferred income. Keep in mind that your custodian will sign and process all of the documents required for closing, since the IRA account actually owns the real estate in your name.
See What Actual Investors Have to Say About Buying Real Estate with an IRA!
With the help of our representatives from IPM, their patience and with our representatives in the U.S. to establish the self-directed IRA we were able to successfully manage the process.“
Saul  California, USA
I think we ended up with a very reasonable good deal on the places that we purchased. 
...it was the best investment we could have made.”
Rob & Kathy
California, USA
I would recommend IPM to anyone who’s looking to buy property in the Riviera Maya. The process has been easy, seamless and very friendly. The people are great and it’s been a really successful, positive experience.”
Laura  California, USA

Q: Why haven’t I heard of this before?

A: Most likely, it’s because your traditional financial advisors aren’t interested in handling an investment that doesn’t pay commissions the way stocks, bonds and mutual funds do.

Q: Is buying real estate in an IRA a taxable event?

A: No. The investment is held in the same way as stocks and bonds – as a tax-sheltered asset in your retirement account.

Q: Can I be the property manager on the investment property?

A: No. The IRA owner will receive rental income and expense information, but the property must be managed by an independent third party.

Q: Can I rent out property owned by my IRA?

A: Yes. The IRS has no problem with your IRA renting, buying, selling to non-lineal relatives, including brothers, sisters, aunts, uncles, cousins, etc.

Q: Is there a limit to how much profit I can make?

A: No! there is no limit to the total return on investment you can make from real estate deals in a Self-Directed IRA account.

Q: Can I sell property I already own to my Self-Directed IRA?

A: No. You cannot personally own property in your IRA account.

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