With fractional real estate ownership, you can invest money into several properties. This is possible because you become one of the owners of the property, due to which you have to pay money. Even the risks associated with investments are largely reduced with this form of ownership. On the other hand, the possibilities of getting more profits are increased.
Whenever you purchase a property, you have to pay extra costs like renovation, property outfitting, and furnishing. But, with fractional ownership, all these costs can be saved. Even the time and hassles of outfitting the property are saved. This type of benefit is rarely offered by any form of real estate investment.
After purchasing the property, the owners have to take care of costs like repairs insurance, maintenance, and property tax. Some investors even hire property managers to take care of these operations. If you have a fractional ownership of the property, you will have to pay a minimal amount to maintain the property or for tax-related expenses.
And, the best part is that you don’t have to handle the tenants. Everything is taken care of by the trust. Due to all these advantages, fractional ownership related to real estate is gaining popularity. We, being one of the most trusted 1031 exchange companies, help you acquire fractional real estate ownership through DST investments.
With DST investments, you can enjoy all the benefits we have discussed above, along with the ability to defer taxes on capital gains through 1031 exchange.
We, at FAI Exchange, have always helped accredited investors to invest real estate through Delaware Statutory Trust. We also help the investors by informing them about different aspects of 1031 exchange.
Through this blog post, we discuss some essential tips you should know related to 1031 tax deferred exchange.
Don’t forget the expenses
You can pay some expenses with the exchange proceeds. These expenses include escrow fees, transfer tax, brokerage commissions, and exchange fees. This will not affect your deal in terms of tax-related benefits.
Ensure the proceeds are safe
The funds you receive after selling the relinquished property are held by an intermediary till you acquire replacement property. Check how this party is holding the funds. Check the account type the intermediary is using for keeping the funds. You must also ensure that the intermediary you have selected is reputable and financially stable.
The documents should be signed before closing
Exchange documents such as agreement between intermediary and real estate investor, notice to the buyer, etc. should be should be signed before closing on the replacement property.
Purchase enough replacement property
The replacement property you are acquiring should be of equal or greater value than the property you have sold. All the net equity you have received from the sale should be invested into the purchase.
If you are seeking right real estate investment for your exchange, contact us for Delaware Statutory Trust (DST) properties. There are various other benefits of DST properties that individuals are unaware of.