When considering a 1031 exchange, investors tend to focus on the benefit of being able to defer taxes, but did you know that is not the only benefit?

CHANGE PROPERTY TYPE

A 1031 exchange provides the opportunity to change property types. For example, an investor can sell their office building and invest in a like-kind property, such as multifamily or raw land. This can be especially helpful as demand for property sectors change. Recently, we have seen a decrease in demand for office space as the result of the pandemic and an increase in demand for multifamily, as Millennials continue to delay the purchase of a home. 

Examples of like-kind properties:

• Office Buildings
• Retail Centers
• Warehouses
• Industrial Property
• Single-Family Rentals
• Apartment Buildings
• Vacant Land
• Hotels and Motels
• Condominiums

MOVE MARKETS

Shifting demographics and economic trends create opportunities across the country. When taking advantage of Section 1031 and investing in a Delaware Statutory Trust or DST, you can investment in other real estate markets or in states with no state income tax without having to uproot your life and move.

PASSIVE PROPERTY MANAGEMENT BY INVESTING IN A DST

Realize the benefits of investing in real estate without the hassle of managing the property yourself. By investing in a DST, you can enjoy a steady income stream without the inconvenience of the Three T’s – tenants, toilets, and trash.

INCREASE YOUR INCOME POTENTIAL 

DST investors may receive regular distributions on their investment without having to actively management the property.

SUCCESSION PLANNING

Because there is no limit to the number of 1031 exchanges you can participate in, some investors continue to reinvest until it is time to pass their assets to heirs. At that time, their heirs realize the basis by which capital gains are calculated are stepped up to the current market value of the assets and often realize no capital gains tax.

There are numerous benefits associated with taking advantage of a 1031 exchange. It is important to consult your accountant and other advisors to fully understand the impact to your unique situation and determine if participating in one may be beneficial to you.