When we think of 1031 exchange, the first thought that comes to mind is that helps deferring the capital gains tax related to real estate investments. But, this is not the only benefit of 1031 tax exchange. Confused?
Ok, without further ado, let us discuss some other benefits you can enjoy if you indulge in 1031 exchange.
You can increase your regular income
If you are an owner of a vacant land thatÂ’s not drawing you any income on a regular basis, then you can think about exchanging it. You can swap it for residential or commercial real estate to get returns in the form of rents.
Consolidate your property
When an investor owns multiple investment properties, if often becomes challenging for him/her to manage the real estate. The investors can use 1031 exchange to own a single property instead of multiple small-sized properties.
Diversify the portfolio
Some individuals do the exact opposite of what we have discussed above. They sell their single property to acquire different property types.
Fractional real estate ownership
This is applicable if you are planning to invest in DST (Delaware Statutory Trust) property. A DST property has multiple owners, which decreases the amount to need to pay to get a share of property. It also reduces the burden or managing the property and lets you further diversify the portfolio.
If you are interested in fractional real estate ownership through 1031 exchange, connect with FAI Exchange. They will find you a DST investment according your budget and needs.