Do you own an investment property? If you do, there is a very good chance that it has appreciated in value. If you are thinking about selling, but have concerns about paying Uncle Sam, consider doing a 1031 Exchange.
What is a 1031 Exchange?
A 1031 Exchange affords you the opportunity to preserve your equity. Instead of paying taxes, you can use the equity in your current property to purchase a new property. In other words, you can keep your equity working for you. And, by purchasing a property with greater potential, you can increase your cash flow and create even greater appreciation over time.
Lots of Options for a 1031 Exchange
So, why not sell your existing property and exchange it into a new property? Perhaps one in a better location or in better condition. Or, perhaps a different property type altogether. The great thing about IRS “like-kind” exchanges is that you can mix and match property types. You have choices. For example, you might want to sell a single-family home for a vacation rental. Or, maybe you want to get out of the residential market and purchase a commercial investment property. Lots of different properties qualify for an exchange, so don’t limit yourself. You can even exchange multiple properties for one property or perhaps one property for multiple investments. The beauty of a 1031 is that it gives you options and opportunities to maximize your investments.
If the idea of an exchange appeals to you, be sure to seek the advice of your CPA or attorney. You’ll also want to make sure you have a Qualified Intermediary to facilitate the exchange and to control the funds. And, of course, a knowledgable Realtor well-versed in 1031 exchanges is a must.
I’ve transacted lots of 1031 Exchanges over the years, for my clients and for myself. 1031s have proven to be an effective way to increase cash flow, maximize appreciation, and to save on tax dollars. With the right team of professionals, you can exchange your existing investment property(s) for something that works for you.
Want to Know More?
For more information on 1031 Exchanges, give me a call or shoot me over an email. I’d be happy to walk you through the steps……the steps that will save you taxes and make you money!