For many people, the bulk of the money that they’ve saved is in an employer-sponsored retirement plan (such as a 401k) and/or IRA account. So, in order to access these funds to purchase certain “tangible” assets like real estate, you could face some significant penalties – on top of losing the tax-advantaged status of the growth in these “qualified” programs.

Typically, real estate, precious metals, and various other assets may not be purchased in qualified retirement accounts. So, even if you have the option of choosing stocks, bonds, and mutual funds, you might not attain the diversification – or the performance – that you had hoped for.

But there is an option that could provide you with a win-win situation by allowing you to place rental real estate in a retirement account, while the equity in these properties grows tax-deferred or tax-free. This is through a self-directed IRA (Individual Retirement Account).

Not all banks and financial institutions offer truly self-directed IRAs, though – and there are several important rules that must be followed in order to for the account to maintain its tax-advantaged status. For instance, you (and a list of affiliated persons, such as immediate family members) may not reside in – or even use – the property that is held in the IRA.

Even so, having a self-directed IRA can allow you to have much more control over what you own in the retirement account(s), as well as to do so in a much more tax-friendly way, as the income and any profits upon selling real property will flow back into the IRA.

If you own – or you plan to soon purchase – residential rental property in Orlando or Central Florida, give CFL Property Management a call at (407) 429-4834 and see how we can assist you with finding and screening tenants, collecting rent, keeping up with the day-to-day maintenance, and responding to emergencies. Or send us any questions that you have by going to We look forward to helping you with your real estate assets.