Let’s Talk About Retirement

Can my retirement account invest in real estate that I purchase for leasing to unrelated tenants?

Posted by Retirement Advisor

Michele L asked:


If I have a retirement account, say a 401k or an IRA, can I use those funds - not to borrow - but as an investment in a mutli-tenant residential apartment complex that I will be leasing to unrelated tenants to derive income? How is this done? Who do I talk to about the details?

BIANCA

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This entry was posted on Friday, December 5th, 2008 at 4:10 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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2 Responses to “Can my retirement account invest in real estate that I purchase for leasing to unrelated tenants?”

1. Frank Castle Says:
   December 5th, 2008 at 11:30 am

   Yes. (If the Apartment Complex is part of a publicly traded REIT)

2. Auntie Mame Says:
   December 6th, 2008 at 6:57 pm

   If you can find an IRA trustee to do it, it is allowed. But with strict limitations, including: Your IRA must own the real estate strictly as an investment, which means no use by you or certain family members. The IRA trustee must also hold legal title to the property. And finally, your IRA must have sufficient liquid assets (either from other investments in the account or from your annual contributions) to cover any costs associated with owning the real estate.

   My guess is that the trustee, if you could find one that will do it, will charge a large annual fee to handle it.