STR purchase with SDIRA

[John Romero]

*Outside of the legal issues as I’m sorting that out with my custodian*

I'm interested in purchasing a short term rental with my self directed IRA. Has anyone done this and can lend some advice on lessons they've learned?

I think this could be the best return on my money. If I can find a property that the numbers work with management as I wouldn’t be able to work on the business. 

Again besides the legal issues my other thought is that I would rent the property one week out of the year and go through the normal way of booking as if I didn’t own the property. I’m interested in purchasing in Florida, possibly destin area, Pensacola area, or even gulf shores AL area.  Thanks

[Brian Eastman]

@John Romero

You cannot rent a property from your self-directed IRA. That would be a self-dealing prohibited transaction with a risk of severe tax consequences.

A self-directed IRA is purely a means to diversify your tax-sheltered retirement savings. You cannot personally benefit from the IRA or create transactions between yourself and the IRA.

While an IRA can invest in a short term rental, there are a lot of simpler and cleaner transactions types that are often better suited to IRS rules.