Property management for properties in a self-directed IRA

[Eric Goodman]

We've been using Vacasa for a property that is held through a self-directed IRA which stipulates we are not supposed to be doing the "property management".

We were considering using Evolve and I wondered if anyone has feedback they can share about using them?  Sounds like with them we have to find our own people for cleaning, maintenance and they focus on the marketing?  I'm wondering any recommendation on how to go about finding and coordinating with cleaning crews, etc. . Note - this is an out of state property in Surprise, AZ  - THANK YOU

[Drew Sygit]

@John Underwood 

Once you create a Self Directed IRA and select a property, you can manage the property in one of three ways.

1. Manage through a Self Directed IRA Custodian - The IRA custodian is involved in each transaction under this property management structure. When rental income is due, the tenant sends the payment to the custodian, who then deposits the income into the owner's IRA. If expenses (such as electricity and water bills, remodeling costs, etc.) are due, the IRA owner informs the custodian of the amount and where to send the IRA funds. Since communicating with a custodian for each transaction is typically time-consuming and fee-intensive, investors often choose a different way to manage their rental property.
2. Hire a Property Manager - The second option involves the IRA hiring a property manager to perform all administrative duties, including paying expenses and receiving rental income. The property manager typically takes a percentage of the rental income or charges a monthly fee as payment for their services. Hiring a professional property manager can be beneficial, as they understand the rules and best practices of managing a rental property.
3. Create an IRA LLC - The third way to manage a Self Directed IRA-owned rental property is to invest your IRA into a newly created LLC. The Self Directed IRA owns the LLC and the IRA accountholder manages the LLC. The IRA's funds are deposited into an LLC checking account and the accountholder is free to write checks to make payments and deposit rental income into this account. This property management structure is the most popular, as it ensures quick access to the IRA funds and provides asset protection. The IRA owner also has more freedom to manage the property, without having to contact a property manager or custodian. 

https://uscode.house.gov/view....