Warehouse Investing

Written by Johnny Kitchens
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Warehouses represent commercial real estate investment options that can require fewer maintenance and repair calls. Depending on how the deal is structured and how the space is occupied, warehouses can be a relatively low-maintenance investment. Warehouses generally have less complicated plumbing, electrical, and heating systems which means there are fewer possibilities for costly calamities or the constant need for maintenance.

On the other hand, warehouse operations can carry their own difficulties. There are insurance issues regarding the facilities, the equipment, and all of the merchandise that will be stocked at the warehouse awaiting shipment. You will also need to consider who will be paying for the utility costs of operating the warehouse. All of these factors need to be considered in the beginning and you may need to hire outside attorneys to draw up the appropriate contracts.

Another thing to consider is the fact that every expense will need to be paid for with funds that come directly from the IRA. The rules governing IRAs require that your IRA funds and your regular assets do not co-mingle. This means you cannot pay any expenses for an IRA investment with funds from outside the IRA. It must be treated as a wholly independent investment. You can be penalized heavily for ignoring or stepping outside of those rules.

Finding an Advisor for Warehouse IRA Investments

Your choice of an IRA advisor is crucial to the success of your IRA. If you have certain types of investments in mind, you need to be certain that your advisor is familiar with the details of such investments. This is true of warehouse investing, real estate investing, franchise investing, and most other non-traditional investments. Most advisors can advise you about stocks, bonds, and mutual funds, but non-traditional investments can require a little more know-how.


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