There are so many things to think about when you’re doing a 1031 Exchange. One of the most important is finding the right DST (Delayed and Simultaneous Transaction) property. But how do you go about finding the right one? Here are our top ten tips on how to find the perfect DST property for your 1031 Exchange:
1. Look for a property that meets all of your investment criteria:
This may seem like common sense, but it’s important to be specific in what you’re looking for. Are you looking for a certain type of property or area? Make sure the property you choose meets all of your investment criteria.
2. Consider the location:
If you’re looking to do a 1031 Exchange, chances are there is some reason you need to liquidate your current investment property. Maybe the area has become over-developed, over-populated, or just isn’t as active as it once was. While finding the perfect DST property may be important for your exchange, finding the perfect location could be even more so.
3. Is now the right time?
Another thing that can affect whether or not now is the best time to do an exchange is if there are certain economic factors affecting the area where the DST property will be located. If there was recently a major fire in California, for example, it might not be wise to invest in California right now.
4. Research any expenses associated with owning a DST property:
If you’re able to obtain a 1031 tax counsel to do a complete analysis of the DST Property Tax Return and Schedule E of Form 1120S for both federal and state, that would be money well spent. A tax counsel can help you uncover any and all expenses associated with owning the property – like management fees, real estate taxes, depreciation, and interest expense.
5. Understand the benefits of a DST property:
There are many benefits to owning a DST property, chief among them being the deferral of capital gains taxes. Make sure you understand all of the benefits before making your decision. Moreover, a 1031 Exchange is not a one-time event. If you find the right DST property, it could become a long-term investment for you and your family.
6. Consider the potential risks:
Just like with any other investment, there are always risks associated with owning a DST property. Make sure you understand what those risks are before making your decision. This might require speaking to more than one 1031 exchange expert. Taking your time to weigh all the risks associated with DST property will go a long way in making sure you make the right decision for your specific needs.
7. Track the market:
If you’re looking to do a 1031 Exchange potentially, make sure you consider all of your options before making any decisions. Keeping up with current events and the local real estate market will go a long way towards ensuring now is the right time.
8. Get referrals:
There are many benefits to getting referrals when you’re looking for any type of professional service. Make sure you speak with multiple 1031 exchange experts to find the right one for your specific needs. This will help you get a better understanding of all the possibilities.
9. Don’t forget about the fees:
When it comes to doing DST properties for sale, you can’t forget about taxes. Make sure you understand all the fees associated with the process, including the fee for your 1031 tax counsel and any closing expenses involved when purchasing your DST property.
10. Make sure you’re prepared:
Talk to a 1031 exchange expert now about making sure you’re as ready as possible for your 1031 Exchange. A 1031 exchange can be an incredible investment opportunity, but only if you make the right decisions and understand all of the risks and benefits involved.
Making an investment in a DST property is a big decision, but it can be an incredibly lucrative one with the right information. By following these top nine tips, you’ll be on your way to finding the perfect DST property for your 1031 Exchange.