If you're looking for a self-directed IRA custodian for alternative investments, you need to consider fees, but also the level of service and expertise of the company. Use this template to learn how to save over 50% annually comparing self-directed IRA custodians. It will not only help you assess IRA fees but also the quality of service for up to 3 IRA companies, including IRAR Trust Company.
Most custodians have a one-time setup fee for establishing your account. This fee can range from $50 to $300 depending on the custodian or provider. It can also vary depending on your investment types. Providers that create LLCs are usually higher in cost. You should also take into account any annual LLC expenses. By the way, it's not required to create an LLC to invest in real estate.
Custodians charge an annual fee based on the asset type or its value, others may provide an "all-inclusive" fee but still charge additional transaction fees. Make sure you read the fine print, there is no such thing as a no-fee retirement account.
Transaction fees include buying, selling, transferring funds, check requests, etc. Depending on how many transactions you make a year, this can add up.
When it comes to real estate, there is a fee to purchase the property, wire of funds, and some custodians also charge a fee for making the earnest money deposit (EMD). Find out what's included in the purchase fee.
If you have an online "self-directed IRA" through a big bank (Fidelity, Charles Schwab, Merrill Edge, etc.) more than likely this is not a truly self-directed IRA— one where you can invest in all types of alternative assets including real estate. Usually, these platforms allow the buy and sell of stocks. It may be a commission-free, automated investing platform, but you may still be paying for the use of an online brokerage system, Robo advisor, or trading fees.
Fees for self-directed IRAs vary. At IRAR the flat annual fee is $199 for one asset, $274 for two assets. Other custodians can range from $199-$2,000. Fees also depend on your strategy and how many assets you hold. In order to get the best rate for your strategy, compare custodians before you open an account.
IRA fees paid to the custodian to maintain your IRA may be tax-deductible if you file itemized deductions on your tax-return. Also, these must have been paid with personal funds and not from the IRA. Compare Custodians to get the best fees for your self-directed IRA.
There are 3 types of custodial fees that are usually associated with a self-directed IRAs; New Account Establishment Fee, Annual Fee, and Administrative or Transaction Fees. However, some custodians charge other fees per asset, per quarter, etc. In order to get the best rates for your strategy, compare custodians.