Why Consider Investing in a 1031 Exchange
A 1031 Exchange investment would be one of the best of investments that you may be well advised to consider investing in as an investor looking at the real estate market. A 1031 exchange basically can be said to be a tax deferral tool that simply allows you as a real estate investor build your wealth, save on taxes and expand your investment portfolio by leaps and bounds.
The application of a 1031 exchange basically happens to be open and allowed to any investor who so anticipates the sale of an existing property and trade them up for better cash flow. Check out this post and see some of the perks that indeed follow a 1031 exchange. Take a look at some of the answers and reasons given as to why investing and making use of the 1031 exchanges would be a sure approach and a deal worth considering as an investor in the real estate market or field as we have them outlined below.
The first reason why this would be such a sure deal is looking at the tax benefits that it does come with. This is seen in the fact that by choosing to roll one asset into another, you will be able to defer the capital gains taxes that would otherwise be due on the sale of such property. As a matter of fact, this is one approach that will so allow you save thousands and thousands of dollars in taxes.
Secondly, this is a vehicle that, as we have already mentioned at introduction, that will help you greatly when it comes to growing your portfolio and diversifying it as much. This is based on the fact that with a 1031 exchange, as an investor you will be able to take a single high value property and buy several properties that will get you higher returns. Besides this, this is one approach and strategy that will sure allow you as an investor who may be having such underperforming or undesirable assets to upgrade such easily. Actually, they happen to be such a fantastic way for one to transfer out of the kinds of rental properties that may so happen to be way overpriced and at the same time not quite performing in bringing in returns.
The other benefit that makes it so sensible to consider the 1031 exchanges as an investor in the real estate market is considering the fact that they indeed happen to be such sure long term game plans. This is for the fact that they can be repeated for as long as you want to thus allowing an investor defer these taxes somewhat indefinitely.