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Updated about 1 year ago on . Most recent reply

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David Green
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Using IRA to buy rental property

David Green
Posted

I'm over 59.5 so I can withdrawal money from my IRA without penalties. I have a Roth & Conventional IRA.

After watching my retirement funds drop significantly a couple of years ago due to the market I started thinkg of other ways to inveset the money.

I was thinking about withdrawing money to pay cash for a rental property. I currently own two rental properties and like having the passive income. My thinking is that the property will increase in value (similar to an IRA) so I can sell it in 10 or 15 years AND I will have had the monthly rental income during that time. I know I'll have to pay capital gains tax when I sell but I was thinking the monthly rental income will have more than made up for that.

Would I be better off just leaving the cash in the IRAs? Which would give me a better return over 10-15 years?

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Don Harris
  • Realtor
  • Charlotte, NC
467
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935
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Don Harris
  • Realtor
  • Charlotte, NC
Replied

Consider converting your IRA into aSelf directed IRA" . Have the SDIRA buy the rental. All rents go back into SDIRA , totally non taxable event. (You get the cash flow and appreciation but not the depreciation since the SDIRA owns the rental)

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