Why Your IRA Needs To Own Real Estate

Did you know you can buy Real Estate in your IRA or 401k just like a stock or mutual fund? For most people the answer is probably no and the vast majority of people are missing out by being invested in traditional things like mutual funds, ETF’s, stocks or bonds. But there is a secret out there that can unlock the true power of your retirement account if you’re willing to step outside of the 99% and invest how the 1% do. It’s called the self-directed retirement account and it is the investment world’s best kept secret to true wealth creation.

The Self Directed Custodian

So then what is a self-directed IRA or 401k? It is simply a retirement account just like your traditional retirement account with one exception, you decide when, where and how to invest. Right now, your IRA or 401K is probably held in a custodian like Vanguard, Charles Schwab, Fidelity or some other big investment company. These custodians charge you fees and hold your money while keeping track of how you invest. The downside is that they limit your investment opportunities and keep you locked into the stock market with traditional assets like stocks and mutual funds. A self-directed retirement account is held by a custodian in the same manner as a traditional account, but the difference is that you can control your money which allows you to invest outside of the stock market. The list of possible things a self-directed IRA or 401k can invest in is long and broad and the IRS has some very specific rules on what can and cannot be done that you should definitely read before moving forward. There are dozens of self-directed retirement account custodians and a simple google search will yield you more than enough companies to sift through that you can transfer your account to.

That’s all great, but why real estate?

Real estate has proven to be a top performing investment asset. In a study posted by the National Association of Real Estate Investment Trusts, the Russell 3000 Index market was tracked from December 1978, through March 2016. The total returns for listed U.S. Real Estate Investment Trusts averaged 12.87% per year compared to just 11.64% per year for stocks.


Real Estate offers the king of all things. CASHFLOW. Passive cashflow is the aspiration of many investors and is one of the biggest benefits of real estate investing. By owning real estate or investing into a fund that owns real estate, every month when rent is collected and the expenses are paid, the remaining money comes directly to you. In a traditional investment account, you buy a stock or mutual fund and hope that one day you will be able to sell it for a profit. Real Estate investing through your self-directed retirement account can provide you with passive cashflow each month and as long as you are invested into the asset, the cash will be flowing like clockwork. When’s the last time your mutual fund has sent you a check?


As retirement age comes, our ability to produce income each month becomes uniquely critical. Cash producing assets like real estate are the answer to this problem because the real estate held in your retirement account can cut you a paycheck each month you own it. This provides liquidity, cashflow and allows you to bring in money each month without selling any stocks or mutual funds to access your cash. This creates security and predictability which is what we need in our retirement accounts! You won’t be watching the market trying to time an up or down cycle constantly worried about the value of your portfolio and ability to access your monthly cash needs. We are entering into a time where cash producing assets like real estate will reign supreme because of the way they predictably and consistently produce cashflow.

Trying to navigate buying a commercial property can be complicated. Our purpose here at The Monolith Investments is to make the process simple and tear down the veil to expose the masses to its benefits. You can review current investment opportunities through our investment offerings page or establish an account through our secure investment portal to give you access to the deals. If you still have questions or want to know more about commercial real estate investing, feel free to take a look at our home page, or contact us directly, we are always happy to help.