Self Directed IRA and short term rentals? any suggestions?

[Dean Smith]

I am new to investing (though have been in the new home industry for 29 years) and i just recently opened a self directed IRA of which I bought my first investment home. Has anyone had success with a short term rental (Airbnb) and or would they recommend even trying an Airbnb with a self directed IRA?

[Dmitriy Fomichenko]

@Dean Smith

Congrats on your first investment and first post on the forum!

It is possible but you need to be aware of few things:

• You can't manage it yourself, meaning you would have to hire a property management company. The management fees for short term rentals are typically significantly higher because of the amount of work involved. 
• You can't do any work on the property yourself
• Short term rental income might be considered an "active business" therefore be subject to UBIT (Unrelated Business Income Tax)

Hope this helps!