BiggerPockets Daily New Executive Order Changes 401(k) Rules, Making it Possible to Own Real Estate in Them
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Aug 16, 2025 A recent executive order revolutionizes 401(k) plans by allowing direct investment in real estate, which could unleash $9 trillion in capital. This shift opens up new opportunities for landlords and private equity. The discussion covers the intricacies of navigating the new rules, potential investment structures, and necessary IRS compliance. Additionally, it highlights the importance of due diligence and managing risks when incorporating rental properties into retirement portfolios.
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401(k) Rules Could Allow Direct Real Estate
- President Trump signed an order widening 401(k) options to include alternatives like private real estate and crypto.
- This potentially unlocks part of the roughly $9 trillion held in 401(k) plans for private asset managers.
Use Proper Structures To Hold Property
- Consider self-directed or solo 401(k) structures to hold property, with the 401(k) owning the asset and handling income/expenses.
- Use private real estate funds or a 401(k)-owned LLC to avoid direct deed ownership while following IRS rules.
Multiple Investment Pathways Emerge
- Multiple pathways will likely exist: direct self-directed accounts, managed private funds, or 401(k)-owned LLCs/partnerships.
- Each approach shifts compliance and management responsibilities differently between investors and fiduciaries.