Passive Real Estate Investments for Replacement Property
When traditional replacement property is hard to come by many taxpayers look toward passive investment options to complete their 1031 exchange. Some common examples of passive replacement property options in 1031 exchanges include:
DSTs (Delaware Statutory Trusts)
A DST is a real estate investment vehicle that provides investors with access to investment grade real estate that is generally larger than they could have acquired on their own. Through a DST the Taxpayer acquires a fractional interest in a property equal to the Taxpayer’s equity investment.
DSTs allow for diversification of a real estate investment portfolio and eliminate the headaches involved in traditional real estate ownership, the so-called “Three-Ts: Toilets, Tenants and Trash”. DSTs are increasingly popular with seasoned real estate investors that are looking to change their active real estate investment into passive real estate investments, allowing them to retire from property management responsibilities.
This type of investment is intended to provide reliable income with no property management. Also, when the property as a whole is sold (5-7 years typically) the investor also shares pro rata in the increased value, in addition to the quarterly income having been received along the way.
Passive Ownership Through 3rd Party
For taxpayers that want traditional ownership of real property with all of the benefits that come with passive investments, Doorvest provides the perfect solution.
following markets, entirely online so your property options are more expansive than just your local market.
Solutions to Finding Replacement Property in a Competitive Real Estate Market
