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Investor Insights Blog|How to Select the Right Real Estate IRA Custodian

Real Estate

How to Select the Right Real Estate IRA Custodian

A real estate IRA is technically no different than any other IRA (or 401(k)).

The government created the IRA to allow investments to grow tax-free or tax-deferred compounded over time to maximize growth. The IRA can also qualify for yearly tax deductions (depending on the account), provide asset protection and assets can be passed to future generations.

A real estate IRA is unique because it allows investments in real property.

 


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Most IRA custodians only allow approved stocks, bonds, mutual funds, and CDs. A self-directed real estate IRA custodian, such as Equity Trust, allows that type of investment in addition to any type of real estate investment, such as residential real estate, commercial real estate, raw land, and mobile homes, etc.

The growing popularity of self-directed IRAs, especially those that offer real estate investment options, has increased the number of custodians, administrators, and promoters offering self-directed investing options.

As more self-directed IRA providers fill the marketplace, you should do your due diligence to research potential providers to make certain you have the utmost confidence in their experience with real estate investments and the handling of assets.

It is important that you understand what you should know, look for, and ask of any potential self-directed IRA provider before investing.

8 Questions to Assist You in Choosing a Real Estate IRA Custodian

  1. Who is your primary regulator? Is it a State or Federal entity?
  2. What are your investment options?
  3. Do you provide any educational materials to assist with the process?
  4. What are your company’s core values?
  5. How long have you been conducting business as a custodian?
  6. What fees are involved?
  7. How are accounts managed?
  8. Do you have any references, referrals or testimonials?

 


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