SDIRA - Property Management

5 Replies

Good morning,  If I purchase a rental property with my SDIRA do I have to find a company to perform the property management for me?  From my understanding I would assume the answer is yes because if I managed the property myself I would violate the IRS rules.  Looking for feedback on this....thanks.

Hey Bryan,

You are right. You cannot perform management activities on an investment property owned by your SDIRA. 

Being a decision maker for your SDIRA is not prohibited by the IRS. Taking action that results in goods or services, that is prohibited. For example, collecting cash rents directly, fixing leaky faucets, and making improvements would all be prohibited. However, screening and selecting tenants, hiring contractors to make repairs, and coordinating other efforts is not prohibited.

Below is a BP blog post I wrote on this exact topic:

Can I be the property manager for my IRA-owned real estate?

@Loren Whitney, makes more sense basically its ok to manage the place as long as its a hands off approach and I am not doing the work or touching the money.  So all rent goes through Equity Trust (my SDIRA custodian) & all invoices for bills go through them also...?

That is correct. Or you could set up an LLC with Checkbook control and write checks at your leisure. You would have to talk to the representative from your IRA custodian.

@Bryan C. You've got it! Let us know if you have more questions.

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