From portfolio diversification to earning passive income, real estate offers seemingly endless benefits to investors. However, the appeal of adding real estate to investment portfolios is often overshadowed by the three T’s — tenants, toilets, and taxes.
Through the implementation of strategies, such as 1031 exchanges and Delaware Statutory Trusts (DSTs), Clark/Barbour Asset Strategy Partners can direct you toward real estate solutions that create passive income while alleviating the frustrations associated with managing properties.
In coordination with our partners, we explore your options to lower taxable income and help incorporate passive income within your real estate investments.
1031 exchanges allow for the reinvestment of proceeds from one property to another, while simultaneously, deferring capital gains taxes. Through this tax-deferred exchange, investors can maintain their portfolio’s momentum by seeking out promising investments and transferring capital from one property to another.
Benefits of 1031 Exchanges
- Finance new real estate by transferring gains from a previous investment property
- Possible to exchange one property for the acquisition of multiple properties
- Minimize or defer capital gains taxes
Functioning as a separate legal entity, DSTs allow for multiple investors to share a beneficial interest on a property investment. Investors elect a sponsor — commonly a realtor — to manage the property, allowing them to receive passive income with reduced responsibilities. Many property investors find this approach preferable, as it mitigates the difficulties that arise from taking on more traditional roles, such as landlords.
Benefits of DSTs
- Eliminates frustrations associated with the 3 T’s of property investment
- Sponsors manage the property while you earn passive income
- 1031 exchanges can qualify for DSTs
For more information regarding our real estate planning services, contact us today.