Can My Property management comp manage my selfdirected IRA homes

[Jim Carvajal]

I have a property management company and have always used another mgmt company to manage my personal self directed IRA owned properties. Recently heard someone saying you could manage your own property under your property mgmt company. Im not sure if this is true or not. I usually rather be safe than sorry. Especially with the IRS. but If it might be possible can someone point to to where I can confirm this?

[Brian Eastman]

Jim,

With a self-directed IRA that offers checkbook control, you can provide limited property management services for a handful of doors.

What the IRS prohibits is for you or a disqualified person to benefit from or provide benefit to the IRA. Your personally owned property management company is a disqualified person.

For you as an individual acting as manager of an IRA owned LLC to execute a contract, pay expenses and receive income - on a limited basis - is not going to be considered "adding value through the provision of goods or services". In a conventional IRA you can do considerable work to research publicly traded stocks and funds and push the buy/sell buttons on your account dashboard. The acts of putting capital to work and overseeing the investments of the IRA are not a problem.

If your IRA is big enough to hold 10+ doors even just pushing the paper around could require significant time and energy, and having a 3rd party property manager would be advised. Keep in mind, there is no proscribed IRS threshold, so when I say 10 doors, that is a reference point for "now it is a lot of work".

You absolutely may not benefit such as by paying yourself, nor may you provide benefit to the IRA via sweat equity work on property, more involved actions like an eviction, etc.

To use your personally owned property management company, however, would be a clear violation. The company cannot get paid, and for the company to provide its services for free would be viewed as a benefit to the IRA.