Finding an ideal replacement property for your 1031 exchange may require rigorous effort from your end. Along with the rise in the number of 1031 investors over the years, getting hold of 1031 Exchange Properties when required has become quite difficult. However, the availability of a replacement property entirely depends on what kind of property it is. For example, retail shops or medical offices can be found easily whereas, you may have to sweat for a multi-family building or an industrial property. Therefore, you must decide in advance which property you want to acquire as your 1031 exchange replacement.
Different Types of 1031 Exchange Properties –
Almost every investment property qualifies for a 1031 exchange, some of which are –
- Retail Shop
- Industrial Properties
- Multi-Family Apartments
- Office Buildings
- Medical offices
- Single-Family Homes
- Triple Net Properties
- Self-Storage Spaces, and so on.
When locating a replacement property, a 1031 investor must pay attention to the rule that requires the value of the replacement property to be equal to or greater than the value of the relinquished property. Not only this, but both relinquished and replacement properties must have equal debts.
How to close on a replacement property?
Finding a property that fulfills all these requirements is certainly not easy. In case the value of your replacement property is less than that of the relinquished property, you’ll have to pay taxes as it will result in a Boot. A Boot can be defined as any cash or profit received by an investor at the end of a 1031 exchange. As per the rules, a 1031 investor need to pay taxes on the gains recognized at the end of their exchange. Therefore, your calculation must be accurate do you wish to defer capital gains taxes using a 1031 exchange.
The future of any real estate investment depends upon the productivity of the property. After all, it’s the revenue generated by the property that counts. To maximize your profit, you must pay attention to a few factors, such as location, neighborhood, development, crime rate, etc. while closing on a replacement property.
Is there anything called 1031 Exchange Properties List?
Yes, there is. Most real estate firms have a list of 1031 properties that are available for sale. However, it’s not that easy to get hold of one such list as they may charge you a significant amount. Your Qualified Intermediary can also help in finding a list of eligible 1031 exchange properties. In case you don’t know any of them, you can consult a 1031 expert for assistance. To speak to a 1031 expert, you can call 888-993-2835 or email us at info@1031Xchange.com
1031 Exchange Experts, 1031 Exchange Property for Sale 