Are there SEP individual-retirement-account custodians that allow the purchase of real estate?
Some specialty custodians let you buy real estate inside your IRA — whether it is a Simplified Employee Pension, or SEP, plan that many small businesses use or another type of IRA. The property is treated as an IRA investment, similar to purchasing a mutual fund or stock. For instance, Sterling Trust Co., Pensco Trust Co. and the Entrust Group all offer self-directed IRAs that allow purchasing real-estate investments, such as raw land or rental properties. They charge a fee per real-estate purchase, often between $100 to $200, along with an annual maintenance fee based on the account’s value or a flat fee per investment. Entrust Group, for one, lets clients choose to pay either a flat $250 per asset a year or a 0.3% to 0.8% of the account’s value, capped at $1,850 annually, according to its Web site. But there are so many complex rules and possible financial drawbacks to buying property through an IRA that it’s generally best not to do so. Bill Fleming, managing director of Pricewaterh
