Investing in real estate with a self-directed IRA can be an attractive option for individuals looking to diversify their retirement portfolio. However, there are risks involved that must be carefully considered. One major risk is the potential for illiquidity, as real estate investments may take longer to sell and generate returns compared to other asset classes. In addition, there is a risk that changes in the market and unanticipated costs will lower the property's value. Recognizing that self-directed IRAs require active management and continuous property upkeep, which may be time-consuming and expensive, is also crucial. Prior to making any real estate investment with a self-directed IRA, careful due diligence and a complete grasp of the risks and potential benefits are essential.
Risks of investing in real estate with a self-directed IRA.
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