Estimated reading time: 4 minutes
Investing in real estate through your IRA can be a powerful strategy, but real estate comes with real, ongoing expenses.
Think insurance, property taxes, utilities, maintenance, and repairs. When you own a property personally, paying these bills is simple. You pull out a credit card, write a check, or pay online.
When the property is owned by your IRA, the process works a little differently.
An IRA-owned property is not owned by you personally; it’s owned by your IRA. Because of this, you cannot pay property expenses using personal funds. Doing so would violate the IRS’s disqualified person rules.
Instead, expenses must be paid using cash held within your IRA and coordinated through your self-directed IRA administrator.
Here’s how the standard process works:
This method is compliant and has been used successfully by real estate investors at The Entrust Group for decades. However, it’s not always the most efficient option.
Most administrators (including Entrust) charge a fee for processing these transactions, and over time, those fees can add up and reduce your IRA balance.
If you’re looking for more flexibility and efficiency, there are two popular alternatives:
A self-directed IRA LLC (often called an IRA LLC) is a limited liability company owned by your IRA that gives you checkbook control.
By setting up an LLC in your IRA’s name, you can pay investment-related expenses directly from the LLC’s bank account. This means you no longer need to submit individual payment requests to your SDIRA administrator. Simply write a check from the LLC to cover eligible expenses.
That said, forming an IRA LLC takes planning. You’ll need to work with an attorney who understands IRA and tax rules to ensure the LLC is structured correctly. Costs vary, but legal setup can be expensive and requires ongoing diligence to remain compliant.
If you’re looking for a simpler option without forming an LLC, the myDirection Card may be a better fit.
The myDirection® Visa® Card, available exclusively through The Entrust Group, is one of the easiest ways to pay real estate expenses using your IRA.
The card functions like a debit card and is preloaded with undirected cash from your IRA. Instead of creating an LLC to gain checkbook control, the myDirection Card allows you to pay eligible expenses instantly—no paperwork, no waiting.
Here’s an example of how it works:
Now imagine you need to pay:
With the myDirection Card, you simply swipe the card to pay each expense. The total $3,000 is deducted from your card balance, leaving $2,000 available for future expenses.
No checks. No forms. No delays.
Below are answers to some of the most common questions we receive about the myDirection Card.
That’s it. Funds are typically available on your card within one to three business days.
Yes, you can return unused funds to your IRA at any time.
Your funds will be returned to your IRA within one to three business days.
Yes. All transactions must be certified within 30 days of the transaction date. Transactions that are not certified may be treated as distributions from your account. Uncertified transactions will display an orange “Certify” button next to the transaction ID.
To certify a transaction:
Be sure to retain receipts for your records.
The myDirection Card has a $25 one-time setup fee and a $9 quarterly fee.
Yes. The myDirection Card is accepted anywhere Visa is accepted.
With just a few minutes of setup, the myDirection Card can save you time, reduce paperwork, and simplify how you pay investment-related expenses.
Interested in getting started? Watch this short Entrust Knowledge Base video to learn how to apply: