How to Invest in Real Estate with Your IRA

Did you know that you can invest your retirement funds in real estate? Section 408 of the Internal Revenue Code permits you to purchase land, commercial property, residential property, condos, and more with money from your IRA retirement account.

The first step is establising a self directed IRA. Your typical IRA restricts your investment options to a variety of mutual funds. A self directed IRA allows you to personally choose where the money will be invested. The next step is to purchase the property in the name of the IRA. This means that the property won't actually be held in your name but rather the name of the retirement account where you've contributed your money.

Use caution with this option as the IRS does not allow you to use property owned by your IRA as a personal residence or vacation home. You also cannot lease space in the IRA owned property for your business.

All in all, this is a great way to take advantage of the current buyer's market and prepare for retirement. Click here to read the National Association of Realtor's article on buying real estate in your IRA. You can also send me an email at c_lusby@kw.com if you'd like more information on getting started.