Owning real estate is a great way to diversify your investment portfolio. But owning investment property isn’t without its headaches — managing tenants, navigating rent control and handling repairs can wear even the most seasoned investor down. If you’re looking for retirement income without the burden of active management — and don’t want to simply sell and absorb a large tax bill — there may be a great option available to you called a Delaware Statutory Trust (DST).
What Is a DST?
When you sell an investment property, you can defer the capital gains taxes through a tax-deferred 1031 exchange into one or more like-kind investment properties — and real estate owned by DSTs qualifies. With DSTs, you’re investing in institutional real estate, including property types such as multifamily, healthcare, self-storage, retail, office, senior housing, industrial, hospitality and more.
Benefits of DST 1031 Exchanges
- Go from active to passive. Leave the landlord life behind and reclaim your time for travel, family and the things you actually enjoy.
- Potentially higher income. DST income may be higher than your previous property, thanks to new depreciation that can offset some or all of it from taxes.
- Institutional-quality properties. DSTs are made up of large-scale properties that are otherwise out of reach for individual investors.
- Nonrecourse loans. Loans are nonrecourse to you personally and won’t appear on your credit report.
- Low minimum investment. You can get started with as little as $100,000 for a 1031 exchange.
- Built-in diversification. Divide your investment among multiple DSTs to build a more diversified real estate portfolio across different geographies and property types, reducing risk.
- Step-up in cost basis. DSTs receive a step-up in cost basis upon death, which helps minimize the tax burden for your heirs.
- Monthly income, direct deposited. DST income is paid out monthly and sent directly to your bank account.
- Keep exchanging for life. The DST structure allows you to continue exchanging real estate going forward — deferring taxes for as long as you choose.
Securities offered through Purshe Kaplan Sterling Investments (PKS), Member FINRA I SIPC and headquartered at 80 State Street, Albany, NY 12207. Tel: 518-436-3536. Richard is a Registered Representative of PKS which is otherwise unaffiliated with Global View Capital Advisors. Additional information can be found at www.brokercheck.finra.org.
Rich Gibson is Executive Director of Global View Capital Advisors, where he manages the Long Beach branch, and serves as an Investment Advisor with Global View Capital Management. A lifelong resident of Long Beach, Rich has been married for 46 years and is the proud father of three grown children and grandfather of six.
To learn more about 1031 Exchanges, Delaware Statutory Trusts, and whether a DST could be the right solution for your investment property, contact Rich at (562) 879-9743 or rgibson@gvcaponline.com.