How to Use a IRA to Invest in Real Estate

Investing in real estate through an IRA can be a smart way to diversify your retirement portfolio. Here are some general guidelines on how to use an IRA to invest in real estate:

Choose a self-directed IRA custodian

This custodian allows you to direct your IRA investments to whatever you want - not limiting you to stocks and mutual funds.

Fund your IRA

Once you have a self-directed IRA custodian, you'll need to fund your account. You can do this by: (a) transferring money from an existing IRA or (b) rolling over funds from a prior employer’s 401(k) - which you are free to use without penalty - or other retirement account.

Identify a real estate investment

With your self-directed IRA in place, you can start looking for real estate investments that meet your goals and risk tolerance. This can include investing in a real estate syndication or fund that is purchasing self-storage facilities or apartment complexes.

Purchase the real estate investment

Once you've identified a suitable real estate investment, you simply need to complete paperwork and direct your custodian to transmit the funds.

Investing in real estate through an IRA can be a powerful way to diversify your retirement portfolio - away from solely stocks and mutual funds - and potentially earn significant returns.