- It is vital to do your own proper due diligence with a self-directed IRA
- Look at the investment options available to you
- Research the potential investments
- Due diligence with Real Estate
When you’re self-directing your IRA, it’s up to you to do the proper due diligence and research before investing. What is due diligence? It means you will ensure that you invest smartly and with purpose. It means you will investigate potential investments thoroughly before putting your money in them. The following are a few steps to help you do proper due diligence when investing in a self-directed IRA.
Look At Your Investment Options
The first step is to learn about all of the different investment options available to you. This includes learning about traditional investments like stocks and bonds and alternative investments like real estate and private loans. It’s essential to understand the positives and negatives of each type of investment before you decide which one is right for you.
Research The Potential Investments
Once you’ve decided which type of investment you want to pursue, it’s time to research potential investments. This step is an important part of the process because it will help ensure that any investment you make is a good fit for your portfolio. When researching potential investments, look at things like the company’s financial statements, the management team, and the overall industry.
Once you find a potential investment that appears to be a good fit, thoroughly investigate it. This step includes reading reviews, talking to other investors, reading and understanding the fine print of any paperwork to be signed, and doing your research. It’s essential to make sure that you’re comfortable with an investment before putting your money into it. Get investment advice from professionals who are experts in the investment you’re looking at.
You are the one who needs to make sure you understand what you are investing in, and going above and beyond with this step can pay off greatly for you.
Real Estate Due Diligence
One of the most common investments inside a self-directed IRA is real estate. When performing due diligence on real estate investments, you’ll want to look at things like the property’s location, the condition, and if it fulfills your purpose for investing in real estate with your Individual Retirement Account. You’ll also want to make sure that you understand the fees associated with purchasing and owning the property. Make sure to visit the property, and ensure what you are expecting the property to be like is correct.
Real estate can be an excellent investment inside of an IRA, but time and time again, we at Accuplan have heard of those swooned into real estate deals that are cheap and offer great returns. These types of deals that provide crazy returns or are incredibly cheap can indicate that this is too good to be true.
Performing due diligence is very important when self-directing your IRA. By learning about all of the different investment options and investigating potential investments thoroughly, you can help ensure that your self-directed IRA investing is a success. If you have any questions about self-directed IRAs or need help, please contact us at Accuplan. We are happy to help you start your retirement investing independence.