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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Real estate in IRA account

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: Can I invest in real estate in an IRA?

A: Yes but keep in mind than all IRA investments must be held in a qualified trust, so owning an individual piece of real estate in an IRA would be difficult. Few, if any, trustees offer this type of service for privately owned real estate. Any trustee that do would offer this service would charge thousands of dollars in fees just to cover their liability exposure so it is also prohibitively expensive to invest in individual properties within an IRA. In other words, it is technically possible to own a rental property in an IRA under the tax law but no one does it in real life because the costs would be far greater than the benefits. A much better way to own real estate in an IRA is to use the Real Estate Investment Trust (REIT) Ishares. This is a simple, efficient and amazingly inexpensive way to invest directly in a diversified real estate portfolio. There are two funds made up of REITs with impressive track records. There is also growing evidence to support the belief that real estate offers a boost to the overall rate of return and reduction in the volatility (risk) from one year to the next when used in combination with stocks in an individual's retirement investment portfolio. More information on the specific charges and procedures is available at


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