Millennium Trust Blog

Financial Planning Month: Explore Investing in Real Estate with a Self-Directed IRA

October 4, 2018
By Millennium Trust
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Real estate as an alternative investment has become an increasingly popular element of a diversified retirement portfolio. But what many might not know is that you can hold real estate in a self-directed IRA – and that there are a variety of benefits of doing so. 

According to a Millennium Trust 2017 survey, 37% of high-net-worth investors own real estate as an alternative to a stock-and-bond only portfolio, but only 10% hold it in an IRA. The research also suggests 63% of high-net-worth investors are interested in real estate. From this, we can infer that the interest in real estate is there, but the awareness and access to information on the benefits and how you can invest is lacking.

What are the benefits of investing in real estate through a self-directed IRA?

The most significant advantage of investing through a self-directed IRA is the opportunity for tax-deferred growth. When you hold real estate in an IRA, all income flowing into the account is tax-deferred until you take a distribution. While there are certain regulations associated with holding real estate in an IRA, investing through your IRA can yield higher returns.

Real estate investment options

Self-directed IRAs can be used to hold a wide range of real estate investments, including raw land, single- and multi-family rental properties, commercial properties, REITs and real estate development companies. The type of real estate can be chosen based on location, previous experience or cash flow analysis.

Real estate has a low correlation with other asset classes, so when the stock market is down, real estate can continue to thrive, making it a valuable diversification tool. Learn more about the IRS rules and regulations associated with using retirement funds to invest in real estate.

Millennium Trust provides the highest level of administrative expertise, as well as exceptional service to individuals wishing to self-direct a portion of their retirement funds into real estate. Click the button below to receive more information about investing in real estate with a self-directed IRA, and be sure to check out the other blog posts in the Financial Planning Month series. 

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The material in this blog is presented for informational purposes only. Millennium Trust Company performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.

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