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 SDIRA 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 IRA LLCs for checkbook control 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 IRA 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 IRA or 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 or mutual funds. 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. There is a big difference between a self managed individual retirement account vs. a self directed individual retirement account— know the difference.
Clients that download the Template and Real Estate Worksheet are saving over 50% on annual fees— you can too.
Some of the transaction fees that may be incurred during a real estate purchase are; processing the buy request, a notary service fee, and wire fees. Some custodians charge a fee for processing the earnest money deposit, and non-recourse loans.
When your IRA owns real estate there are expenses that are associated with the property. For example, taxes, utilities, HOA fees, etc. These fees must be paid from the IRA. In most cases, the custodian will charge a check fee to make these payments on behalf of your IRA.
To get a low fee self-directed IRA, be sure to compare the costs for transactions as well as new account fees and annual fees. Download the free template to get the BONUS Real Estate IRA Fee Worksheet!
Fees for self-directed IRAs vary. At IRAR the flat annual fee is $199 for one asset, $274 for two assets. Other SDIRA 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 a self directed retirement 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.
A Traditional IRA, Roth IRA, SEP IRA or SIMPLE IRA can all be self-directed. The fees can vary depending on the custodian and types of investments in the IRA. For example, a Roth IRA Fee at Fidelity may be different from a self-directed Roth IRA fee at IRAR.