Using a Checkbook Control IRA to Invest in Commercial Property
Imagine an office tenant consistently paying money into your IRA every month. For many investors, it’s not a matter of imagination, but reality. And with a Checkbook Control IRA, you can exercise far more control over how you invest in properties like these. But how does it work, what are the particular risks of a Checkbook Control IRA, and what will you need to know before starting? Let’s dig in.
How a Checkbook Control IRA Works
A Checkbook Control IRA is a type of Self-Directed IRA that allows you to make investments directly, without having to go through a custodian for each transaction. Think of it this way. Instead of relying on a financial institution to manage every move, you can write checks, transfer funds, and execute deals yourself.
In the case of commercial property, the IRA itself owns the property. Any income generated from the property—whether from rent or appreciation—goes directly back into the IRA. This means you can grow your retirement savings in a way that traditional IRAs simply don’t allow. However, there are rules you need to follow, especially considering that you have more freedom with checkbook control.
The Benefits of Investing in Commercial Property Through a Checkbook Control IRA
One of the main reasons investors turn to a Checkbook Control IRA? The freedom it provides. You have the ability to choose exactly where and how to invest your funds.
Many investors like to choose real estate when they have this freedom. Why? Well, some commercial properties can offer consistent income through rental payments from tenants. This regular income stream can be a great way to build wealth over time, particularly if you’re looking for a more stable investment outside the volatility of the stock market.
Additionally, real estate, particularly commercial properties, tends to appreciate in value over the long term. So, if you hold the property for an extended period, you could benefit from both cash flow and capital gains once you decide to sell.
Risks to Consider with a Checkbook IRA
The benefits of using a Checkbook Control IRA for commercial property investments are clear. But there are some risks you need to keep in mind.
First, the property itself comes with all the standard risks of real estate investing: market fluctuations, tenant vacancies, property management issues, and the potential for significant repair costs. These issues can be stressful, especially if you don’t have the resources or experience to handle them effectively.
Another risk? The possibility that you run afoul of the IRS rules. The IRS is strict about what constitutes a “disqualified transaction.” For example, you can’t use the property for personal use—so no vacation homes or office spaces you plan on occupying. You also can’t loan money to yourself or close family members from the IRA. Violating these rules can result in penalties. It may even mean your IRA gets disqualified.
How to Get Started with a Checkbook IRA
Ready to leap? Interested in getting started? You’ll need to set up the right type of account and find a custodian who offers this service. From there, you can begin searching for properties that fit your investment goals. However, it’s important to understand that you’ll have to do your due diligence and thoroughly research any property before committing.
If you know what you’re taking on, great! Now it’s time to get that freedom you’re after. With TurnKey IRA, we can help you set up your Checkbook Control IRA so you’re ready to begin looking for retirement investments on your terms. Just give us a call at 844-8876-IRA (472) today.
Imagine a life where your retirement investments feel as easy to make as any other investment. Sure, rules are separating the two, but once you have a Checkbook IRA in place, you’d be surprised how natural it can feel to make retirement investments. Interested in learning more? Contact TurnKey IRA at 844-8876-IRA (472) for a free consultation. Download our free guide or visit us online at www.turnkeyira.com.
