What Assets Can You Buy With a Self-Directed IRA?

What assets can you buy with a selfdirected IRA

Self-directed IRAs (SDIRAs) allow investors to invest in nontraditional assets such as real estate. While this investment type offers long-term appreciation and growth potential, you must abide by certain rules in order to avoid prohibited transactions such as living or vacationing on properties owned by your IRA and selling it back directly or to disqualified parties.

Real estate

Real estate investments offer high returns and asset protection, and can serve as an alternative to the volatile stock market.

However, self-directed IRAs in real estate can be complex. You cannot use the property for your personal gain and must avoid dealing with disqualified family members. All expenses, such as insurance and repairs must be covered through either your IRA or another permissible third party.

As with any investment, alternative investments pose two additional issues: information and liquidity. Some don’t have their financials verified by an accounting firm and others require extended holding periods or redemption restrictions, so it’s essential that when evaluating potential real estate investments you work with knowledgeable professionals to do your homework and review possible investments thoroughly.


Self-directed IRAs allow investors to invest in various assets, from real estate and private funds to alternative investments such as precious metals and life insurance contracts. Before making purchases or decisions involving self-directed IRAs it’s essential that questions and information is verified before making purchases or decisions. As these accounts are subject to specific rules regarding prohibited transactions such as life insurance contracts and certain precious metals that must not be invested in.

Investors should avoid investments that require maintenance fees or storage charges, which can be costly and may not make sense in an IRA account. Also be wary of transaction-related fees such as moving an investment from one custodian to the next as these charges can quickly add up and diminish returns; sometimes even exceeding its worth altogether!


Self-directed IRAs enable you to invest in alternative assets that have outshone traditional investments, including real estate, precious metals, private equity and cryptocurrencies. However, be mindful that these investments carry greater risk than their traditional IRA counterparts as they offer less regulatory protection and may be harder to verify as genuine.

To avoid fraud, it’s wise to choose a custodian who specializes in SDIRAs. They will establish an LLC for you that the IRA invests in, then transfer its checkbook control back over to yourself so you can purchase real estate (ranging from single family homes, apartment complexes and raw land) as well as invest in startup equity through crowdfunding platforms or purchase other assets; but beware any prohibited transactions such as life insurance policies or collectibles!

Mutual funds

Self-directed IRAs provide an ideal way to diversify your investment portfolio while taking advantage of industry knowledge, protecting retirement savings from stock market fluctuations, and offering greater flexibility than traditional IRAs. However, it is important to remember that the IRS limits what can be invested in.

Self-directed IRAs allow investors to purchase assets such as real estate (rentals and fix-and-flips), private company shares, LLC membership interests, tax liens, precious metals that meet purity standards, foreign currency and cryptocurrency – but it should be remembered that these non-traditional investments carry greater risks than standard IRA investments; it is advised to ask any necessary questions and verify information before making purchases.

Other investments

Self-directed IRAs also enable investors to purchase nontraditional investments such as precious metals and real estate, which may offer higher rates of return than traditional stock and bond portfolios.

Before investing, however, it is crucial to research each asset carefully as some may involve prohibited transactions that incur extra taxes or financial penalties. As always, prior to any self-directed IRA investment decisions it is advisable to consult with a tax advisor first.

When considering alternative investments as potential investments, first identify your desired broad asset classes and then locate a custodian who allows these types of investments. Once this step has been taken, begin searching for potential investment opportunities while taking care to evaluate any prospective custodian based on fees, integrity and customer support before selecting one to manage them for you.

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