A Self-Directed IRA account provides an IRA holder with the ability to choose the kind of investment that caters to his/her needs. A person with a self-directed IRA can depend on his/her own investment expertise to make tax-deferred or tax-free investment in assets he/she knows and understands very well. What most investors aren’t aware of is that the entire range of retirement accounts, including Roth and Traditional IRAs, SIMPLE IRAs and even individual 401ks can be self-directed. As a matter of fact, all IRAs can be self-directed. Just make sure not to choose an IRA provider that restricts the types of investments offered. Most IRA providers today offer traditional securities because they are salable securities that yield commissions. It is for this reason that larger providers don’t provide services for investments in things like Precious Metals, Real Estate, and more.
The value of self-directed IRAs is that the account holder can invest his/her tax-advantage funds in other assets like an investment that is not a security e.g. mutual funds or stocks. This means with a self-directed IRA, you can invest in real estate, private equity, precious metals and more. As a matter of fact, with an IRA, you can invest in anything excluding collectibles and insurance.
A self-directed IRA in real estate can charge rent to tenants, rent commercial space to business, let land appreciate in value and much more. The value of the IRA increases since all income and payments are only made to and from the IRA, but not from the account holder. This shows you have the opportunity to increase the value of your IRA with alternative assets. IRA laws calls for investors to seek services of a self-directed provider to handle administration of their accounts.