A self-directed IRA real estate option is one route that many retiring investors have taken. They recognize the advantages of real estate holdings and know that just like the stock market, the real estate market will boom and bust in cycles, but the good thing about this is that, regardless of numerous cycles, it has a strong survival rate. We don't think real estate would ever disappear from the investment scenario; it remains as one of the more attractive alternatives because of the higher potential of returns than can be gained. Both real estate and stock markets are survivors, but there are plenty of times when real estate returns fare better than stock market returns; not to mention there is more than a perceived value in a tangible asset such as real estate when the market cools off. This is why real estate investments have become a real magnet for investors' retirement portfolios. These investors are looking for the security of a tangible asset while at the same time benefiting from the highest returns on their money.



The key components of a self-directed IRA real estate investment lie in the words, "self-directed." Because of the nature of the self-directed IRA, present and future retirees can now establish a self-directed IRA real estate account with the help of a trusted and competent IRA trustee/custodian and a self directed IRA advisor.

A self-directed IRA real estate portfolio means that investors have the blessing of the IRS to use monies in their IRAs to purchase real estate to achieve their investment objectives. Many people nurture the mistaken notion that this is not allowed by the IRS; this is because IRA advisers would prefer to oversee holdings which they can monitor for their clients and a real estate holding would be administratively cumbersome. That's one. Two, there's nothing in the law that requires them to offer real estate investments to clients. These are the principal reasons why a self-directed IRA real estate option does not appear in the portfolios of millions of investors when in fact, it does not constitute a prohibited transaction by any measure. The only restriction that applies is that individuals with self-directed IRA real estate holdings cannot live in the property they purchase.

For someone new to the game of self-directed IRA real estate options, engaging the services of an advisor, who is well versed with self-directed IRA real estate accounts would make sense. He'll have the expertise to deal with the administrative paper work and the mechanisms to employ so that the investor does not get slapped with IRS penalties and taxes.