Knowing about 1031 Exchange
If you want to engage in property swapping, it is important to know a lot about 1031 Exchange. In fact, the easiest way to learn is through watching YouTube video. However, what you get from the video is merely general information. It is important to dig more data especially when you plan to engage into the actual swapping. You must be looking for a rental property broker to help you do the plan. The right broker has an official website where you can watch the video and get enough explanation of the exchange.
When talking about 1031 Exchange, you will know that it involves two parties basically. Forget the notion of two-party barter since the thought should not be understood in literal terms. You even need to check inputs from IRS Section 1031 to understand the context. As an investor, you must have 1031 like-kind exchange. It allows you to sell the property and to reinvest your income to a new property and do away with capital gain taxes. There are some popular strategies you need to know which will qualify you to have 1031 exchange. Those include exchanging of smaller apartment building into a larger one and exchanging an apartment building into passive or hands-free investment type. It is also possible to exchange your apartment building into co-ownership-type investment if you like.
There are various forms of 1031 exchanges. Those include delayed or forward exchanges which are considered the most common. However, you can also venture in simultaneous, reverse, and improvement exchanges. As you browse further, you come to realize that 1031 exchange has a lot of benefits. If you need leverage, it will surely come to you. You will be able to purchase large property once getting an increased funds through property appreciation.
Besides, you may also have diversification. You have the choice to buy many different products such as retail, net-leased, and office properties. It only shows that you can purchase multiple properties in various markets within the country. You may also experience consolidation. If you want to minimize management responsibilities and maximize economies of scale benefits, then you better sell your small properties in exchange of buying one big property. There is also a possibility to avail an increased cash flow. If you have some properties with little income, you better sell them and avail a big property that can sell well.
Management relief is another advantage. Having various rental properties will push you to experience costly maintenance and intensive management issues. You better focus on properties that will require little time for maintenance or management. Increase depreciation is also another benefit because you can exchange your property into another property that can bring so much income yet can be depreciated. If you seek preservation of wealth, you can also venture into estate planning through 1031 exchanges.
If you need to know the identification and execution timeline, you better check information on the actual website. You also have the leeway to contact Doug Taber. He can explain the details further. You may also send a detailed electronic mail for you to connect.