Reasons To Consider 1031 DST Property
A 1031 DST property is a platform that allows the investor to co-invest with the 1031 exchange investors in single or many institutional-grade properties. 1031 DST property allows the purchasers to have fractional ownership of debt and equities by meeting all the exchange requirements of the investor. Under DST, an investor receives 1099 for ordinary income,1098 allowing for mortgage interest write-off, and an operating statement or gain and loss statement for depreciation.
DST helps the investor enjoy owning real estate without managing the everyday responsibilities of dealing with real estate. Although DSTs are not very new in the market, the current tax laws have made DSTs popular among the 1031 exchange investors.
Minimum investments under DSTs are between $25,000 and $100,000; therefore, a single investor may own a fraction in an entire property and receives a distribution from the operation of the trust. Here we will discuss the don'ts of 1031 DST property.
When investing into a DST, you don't have to worry about:
1. Property Management.
Investors can hand over the management and decision-making responsibilities to an expert team of experienced managers who have endured both the best and the worst of property management situations.
2. Qualify for debt on the property.
DST investors are not required to qualify for the property's mortgage loan. These are the only entities that are liable for the mortgage loan. The investors under DST do not need to provide any personal documentation for loan approval and do not have to worry about other personal assets or liabilities affecting the status of the loan.
3. Take on liability for the property.
The DST is the sole proprietor of the property. The investors are beneficiaries of the DST. Since the investors don't have deeded title of the property, they don't have any personal liability for the property. Regardless of whether there are unexpected issues with the property, beneficiaries can't lose more capital than what they invested in the DST.
4. Invest your amount that corresponds to the 1031 exchange requirements, don't get stuck with Boot.
1031 DST property allows the investor to invest exactly what they want to invest. There is no reason to overextend monetarily or, worse, leave equity uninvested whether the investor is investing all his/her exchange funds into a DST or investing an extra amount after acquiring a property that didn't exactly match with their exchange value. There is no reason to pay taxes on Boot when DST is an option.
5. Search far and wide for a DST that fits your specific criteria.
1031 property is an online marketplace where real estate investors can view, find, and purchase a variety of available, investment-grade, turn-key properties. We present our investors with 1031 exchange-qualified properties through DSTs to guarantee that every 1031 exchange investor has the opportunity to complete a successful exchange.
