Disclaimer: I am a real estate professional, not a financial consultant or retirement planner. That said, this information is fairly basic and easily varified by many reputable sources (below).
A Self-Directed IRA is a retirement vehicle that is capable of investing in a great number of investments including Real Estate. Basically your IRA fund becomes the holder of a real estate asset and grows as the invest accrues rental income and grows in equity. There are restrictions prohibiting using your own IRA to buy your own house or your mothers or buying a college rental house for your daughter and five of her closest friends. The Self-Directed IRA is able to be diversified across several investment offerings as well. The Wall Street Journal has an article advising against the practice. A New York Times article advises this type of IRA would best be left for those with significant expertise in the area they are going to invest in. So an IRA that is self directed is probably only for a few, but it is possible to do, even if complicated.
Filed under: Decoding the Lingo | Tagged: SDI Decoding lingo ira
