Can You Use a Retirement Account to Invest in Real Estate?
Yes, certain retirement accounts can be structured to invest in alternative assets such as real estate. Self-directed IRAs, or SDIRAs, give account holders greater control over their investment choices while keeping the account within a retirement framework.
For real estate professionals and investors, this can be an interesting strategy to explore. According to the National Association of REALTORS® 2026 Member Profile, 41% of REALTORS® own a secondary property, showing just how closely real estate and long-term wealth building can intersect.
But how does real estate investing through a retirement account actually work? And what should you know before considering an SDIRA?
Important: This article is for educational purposes only. Retirement accounts, taxes, prohibited transactions, financing and investment decisions can have significant financial consequences. Consult qualified tax, legal and financial professionals before making investment decisions.
What Is a Self-Directed IRA?
A self-directed IRA is a traditional or Roth IRA that allows the account holder to direct investments into a broader range of alternative assets, including certain real estate investments.
Unlike a conventional IRA that may primarily hold stocks, bonds or mutual funds, a self-directed IRA can provide access to alternative investment options. The key difference is the expanded investment choices available within the account.
For someone who already understands real estate, an SDIRA may provide another way to explore real estate as part of a long-term retirement strategy.
However, greater investment flexibility also means greater responsibility. Investors need to understand the account rules, transaction requirements and restrictions that apply.
How Popular Is Real Estate Investing Through Self-Directed IRAs?
Real estate represents a significant portion of the investment activity taking place through self-directed retirement accounts.
According to the IRAR Trust Company report cited in the original source material, data from 1,997 self-directed IRA real estate transactions in 2025 showed that investments were divided between direct real property and real estate notes.
The report found:
- 44% involved direct real property.
- 56% involved real estate notes.
- Among direct real property purchases, 66% were single-family homes.
- 22% were vacant land.
- California accounted for the largest share of direct property purchases in the report, followed by South Carolina and Florida.
For real estate investors, those numbers highlight an important point: real estate inside a retirement account does not necessarily mean buying and managing a rental property.
What Can You Invest in Through a Real Estate IRA?
A self-directed IRA may be used for certain real estate-related investments, including direct real property and real estate notes, depending on the account structure and applicable rules.
Direct Real Estate
Direct property investments can include certain:
- Single-family homes
- Vacant land
- Other eligible real estate investments
The appeal is straightforward. Instead of purchasing an investment property personally, the investment is held within the retirement account.
But the structure is different from owning a rental property in your personal name. The IRA must remain the owner of the investment, and transactions involving the property must follow applicable retirement-account rules.
Real Estate Notes
Real estate notes offer another approach.
A real estate note is secured by property and can allow an investor to participate in real estate financing without directly owning and managing the underlying property.
According to the source material, 56% of the 2025 real estate transactions analyzed by IRAR involved real estate notes.
That can make notes an interesting option for investors who want real estate exposure without taking on responsibilities such as property management, maintenance, taxes and insurance associated with direct ownership.
What Does Investing in Real Estate Through an IRA Look Like?
The basic process involves establishing the self-directed IRA, funding the account, selecting an eligible investment and completing the transaction through the retirement account.
The process described in the source material includes:
- Open a self-directed IRA account.
- Fund the account by transferring money from an existing retirement account or making a new contribution.
- Choose your investment strategy.
- Make the investment through the IRA.
- Complete the transaction using the IRA structure.
One important distinction is that the IRA, rather than you personally, owns the investment.
For example, if the IRA purchases an investment property, the property and related transactions must remain within the IRA structure. The source material states that the IRA covers eligible property expenses and that rental income is paid directly to the IRA.
Because these rules can be complex, professional guidance is important before moving forward.
What Are the Potential Benefits of a Real Estate IRA?
The potential benefit is greater control over how retirement assets are invested, including the ability to consider real estate and real estate-related investments.
For real estate professionals and investors, an SDIRA may be worth exploring because it can potentially combine retirement investing with an area of expertise they already understand.
Potential considerations include:
- Access to certain alternative investments
- Greater control over investment selection
- Ability to consider direct real estate or real estate notes
- Potential to diversify retirement assets
- The opportunity to use real estate knowledge as part of retirement planning
Of course, an investment strategy that works for one person may not make sense for another. Risk, liquidity, fees, taxes and retirement goals all need to be considered.
What Should You Know Before Investing Retirement Funds in Real Estate?
The biggest consideration is that an SDIRA comes with specific rules and responsibilities.
Investors should understand the requirements surrounding ownership, transactions, expenses and the use of retirement funds before purchasing an investment.
You should not treat an SDIRA like a regular checking account or personal real estate investment account. The retirement account structure must remain intact.
Before making an investment, consider discussing:
- Tax implications
- Prohibited transactions
- Account fees
- Investment liquidity
- Financing requirements
- Property expenses
- Retirement objectives
- Legal and regulatory requirements
A qualified financial professional, tax advisor and legal professional can help determine whether this strategy fits your circumstances.
How Can Real Estate Professionals Learn More About SDIRAs?
The original source material points REALTORS® toward educational resources from IRAR Trust Company, including guides covering self-directed IRAs and non-recourse loans.
IRAR Trust Company resources offers educational information for investors exploring self-directed retirement accounts and real estate investing.
The resources referenced in the source material include:
- Self-Directed IRAs: What You Need to Know to Get Started
- Non-Recourse Loans for Real Estate Investing
- Investing in Real Estate With Retirement Funds
- WealthWise Newsletter
These resources can be useful starting points for understanding how the strategy works before speaking with an investment or tax professional.
Can REALTORS® Access Special SDIRA Benefits?
According to the source material, NAR members may have access to a discounted flat annual fee for SDIRAs through IRAR Trust Company.
The cited NAR member benefit provides a $299 annual fee, with no stated limits on the number of transactions or the amount of assets in the account.
NAR REALTOR® Benefits Program, IRAR
If you are a REALTOR® interested in this option, verify current pricing, eligibility and account terms directly with the provider before opening an account.
Can Real Estate Investors Use Their Retirement Accounts to Buy Investment Property?
Potentially, yes. A self-directed IRA can be structured to hold certain eligible real estate investments, but the investment must comply with applicable IRA rules.
That distinction is important. You cannot simply purchase an investment property with retirement funds and treat it like a personally owned rental.
The account structure, ownership, income and expenses all need to be handled correctly. This is one reason professional guidance is so important when considering an SDIRA.
What Does This Mean for Real Estate Investors?
For someone who understands real estate, retirement planning doesn’t necessarily have to be limited to traditional market investments.
Self-directed IRAs provide another avenue to explore real estate as part of a broader retirement strategy. Direct property and real estate notes offer different approaches, each with its own considerations.
The important takeaway is not that every investor should use an SDIRA. Instead, it is that real estate professionals and investors should know the option exists and understand how it works before deciding whether it belongs in their long-term financial plan.
Ready to Explore Real Estate Investment Opportunities?
Real estate can play an important role in long-term wealth building, but the right strategy depends on your goals, financial situation and investment experience.
If you’re considering purchasing an investment property, exploring real estate opportunities, or simply want to better understand the local market, Contact Roylin Downs and The RoylinSells Group for guidance on your next real estate move.
Frequently Asked Questions
Can you buy real estate with an IRA?
Yes, certain self-directed IRAs can hold eligible real estate investments. The property must be purchased and maintained within the IRA structure, and applicable retirement-account rules must be followed.
What is the difference between a regular IRA and a self-directed IRA?
A self-directed IRA generally provides access to a broader range of alternative investments than a conventional IRA. Depending on the account and applicable rules, those investments can include certain real estate and real estate notes.
Can a self-directed IRA own a rental property?
A self-directed IRA may be able to own an eligible rental property. However, the IRA, rather than the individual account holder, owns the investment, and rental income and eligible expenses must be handled according to the applicable IRA rules.
Are real estate notes an alternative to owning property directly?
Yes. Real estate notes are secured by property and can provide real estate-related investment exposure without directly owning and managing the property. The source material reports that real estate notes represented 56% of the analyzed 2025 SDIRA real estate transactions.
Should I talk to a financial professional before opening a self-directed IRA?
Yes. Because SDIRAs involve retirement rules, taxes and potential prohibited transactions, it is important to understand the implications before investing. A qualified financial, tax and legal professional can help you evaluate whether the strategy fits your goals.
