With the stock market tanking and real estate skyrocketing, is this the time to invest in real estate through your IRA, Roth IRA, or SEP-IRA?

You ordinarily can’t hold real estate with a traditional IRA or Roth IRA (or SEP-IRA) you establish with a bank, brokerage, or trust company. These types of IRA custodians typically limit you to a narrow range of investments, such as publicly traded stocks, bonds, mutual funds, ETFs, and CDs.

But you can invest in real estate if you establish a self-directed IRA with a custodian that allows self-directed investments. Indeed, real estate is the single most popular investment in self-directed IRAs.

Investing in real estate through an IRA is one way to diversify your retirement holdings. There are also some tax advantages. But there also are several disadvantages you should carefully consider.

Establishing a Self-Directed IRA for Real Estate

It is not difficult to establish an IRA with a custodian that allows self-directed investments; there are dozens of them.

Self-directed IRAs can ordinarily be used for all types of real estate investments, including multi-family rental properties, single-family homes, commercial rentals, raw land, farmland, international real estate, tax lien certificates, trust deeds and mortgage notes, and private placements.

The property in a self-directed IRA can be held in ... Log in to view full article.