DST Properties for 1031 Exchange Investors
There are different ways through which 1031 investors can close their transaction. DST investment is one of them. As part of a 1031 exchange, you can buy DST shares as your 1031 exchange replacement property. When you buy DST shares, you invest in real estate properties and not in the trust. DST investment is treated as a real estate investment and that's why it qualifies for 1031 exchange. However, you must have a 1031 DST Properties List in order to invest in DSTs. Otherwise, how will you compare different properties?
DST shares are offered as real estate securities to 1031 investors...
A Delaware Statutory Trust or DST is a private governing trust responsible for buying, managing, administering, and selling real estate properties. DSTs are formed by filing a Certificate of Trust with Delaware Division of Corporations and were first established in 1988 under the Delaware Statutory Trust Act. A DST investor enjoys co-ownership in large institutional-grade properties along with other investors. DST shares are generally offered as real estate securities to 1031 investors and can only be purchased through a real estate broker.
1031 investors receive a lot of benefits through DST investment...
Though there are various reasons why 1031 investors invest in DSTs, here are a few major ones.
Relief from property management - DST investors don't need to bear the burden of property management as DST properties come with pre-arranged property or asset managers. As a result, they enjoy management-free income for a long time.
Low Investment - Due to its large structure, a DST investment may start from as low as $500K. This enables small investors to own institutional-grade properties along with other investors.
Tax Advantages - By completing 1031 exchange using DST investment, 1031 investors can defer up to 100% capital gains taxes.
Relief from day-to-day management responsibilities is relief from all worries for real estate investors. As a property starts aging, it requires repairing and other maintenance quite often. Consequently, the property owner or investor needs to invest more time and money in managing their property, which can't please any investor. To release themselves from the burden of day-to-day management responsibilities, investors prefer an investment structure like DST that comes with no management responsibilities. This could be another reason why you're looking for 1031 Exchange DST Properties.
Because of the relief from day-to-day management responsibilities, DSTs manage to attract investors in large numbers. As DST properties often come with pre-arranged property or asset managers, investors within a DST enjoy a regular flow of income without any liabilities.
1031 Exchange DST Properties are widely available throughout the United States...
While you can find DST properties for sale for your 1031 exchange anywhere in the United States, you may need assistance from a DST advisor or expert. With the rise in the number of 1031 investors using DST investment for closing their exchange, the demand for institutional-grade properties has also increased significantly in recent years. As a result, finding a good DST property has become a bit difficult. That's why the assistance of an experienced DST advisor is required.
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