5 Reasons to consider a DST 1031 Exchange

A Delaware Statutory Trust (DST) is a platform which allows the investor to co-invest with other 1031 exchange investors in one or more institutional-grade properties. DST enables the investor to have fractional ownership of equities and debt, by fulfilling all the exchange requirements of the investor. Under DST an investor receives 1098 allowing for mortgage interest write-off, 1099 for ordinary income and an operating statement or profit and loss statement for depreciation. DST helps the investor to enjoy the advantage of owning real estate without managing everyday responsibilities of dealing with the real estate. Although DSTs are not new in the market, the current tax laws have made DSTs popular among the 1031 exchange investors.

Minimum investments under DSTs are between $25,000 and $100,000; therefore a single investor may own a fraction in an entire property and receives a distribution from the operation of the trust.

5 reasons why you should consider DST 1031 exchange are discussed below:

1. Relief from management responsibilities:

DSTs allow the investor to have relief from management responsibilities as under this investor has the option to hand over the management and decision making responsibilities to the professional team of experienced managers.

2. Acquire investment-grade and high-value properties under DSTs:

It is difficult for real estate investors to invest in multi-million-dollar properties on their own. Delaware Statutory Trusts provides an opportunity for the investors to have partial ownership in the property and allows the investor to experience the benefits that are only found with these types of properties.   

3. Diversification of properties:

DST gives the opportunity for the investor to diversify their real estate property. As if the investor doesn’t want to invest in single property then he can split his investment among multiple DST properties.

4. Distributions are regularized:

DSTs are allowed to keep some amount of cash reserves if the property requires repairs or faces unexpected expenses in between. However, all earnings and proceeds apart from the reserve amounts must be distributed to the beneficiaries on a regular basis and within the fixed timeline.

5. No need to qualify for the debt:

Under DST Investors are not required to qualify for the property’s mortgage loan. They do not require providing personal documentation for loan approval and do not need to worry about other personal assets or liabilities that affect the status of the loan.

All the information provided above has been researched and thought to be knowledgeable for you. For consultation and assistance regarding 1031 exchange you can call – 888-993-2835 or email us at info@1031xchange.com